DURBAN - ASCENDIS Health yesterday swung into a massive R673.80 million loss from a R204.96m profit last year as rising debt, higher finance costs, increased tax expenses and impairments hurt its performance during the six months to end December.
The health and wellness company said that it incurred a R246m impairment during the period with a tax expense increasing to R139m and net debt rising to R6.6 billion.
The group said this pushed its normalised headline earnings down 131 percent to a loss of R43m, with normalised headline loss per share from continuing operations of 9 cents a share.
It said revenue, however, surged 33 percent to R3.98 billion, despite the losses, with normalised operating profit increasing by 27 percent to R486m.
Chief executive Mark Sardi said the group benefited from its largely Covid-19 defensive portfolio and grew international revenue by 35 percent, with revenue from the South African operations increasing by 30 percent.
“While there is still uncertainty in relation to the future impact of Covid19, our priorities remain to protect the health and safety of employees and stakeholders, maintain business continuity and ensure the availability of life saving products to assist in combating the pandemic,” Sardi said.
In South Africa, Medical Devices was the strongest performing business, with revenue accelerating 59 percent through its supply of high-demand ventilators, respirators and testing products during the Covid-19 pandemic.
However, the group said the benefit of these Covid-19 related sales were partly offset by restrictions on elective surgeries in hospitals and fewer trauma cases during the lockdown period. Ascendis continued with its process to sell non-core assets and during the period by selling Scitec International in Hungary for R90m and Ascendis Direct Selling for R10.5m.
It also sold its pharma tender at the beginning of the month and its pharma tender and dispensing doctor business, Dezzo Trading.
The group said the disposal of the Animal Health and Biosciences businesses are both in an advanced stage of negotiations.
Ascendis announced plans to recapitalise its balance sheet, with UK-based Blantyre Capital and L1 Health, two members of the lender consortium holding the company’s debt, advised they had collectively increased their exposure to more than 75 percent of the debt.
The group said these lenders also expressed the view that the divestment of core assets undertaken by Ascendis was not in the best long-term interests of the company and its stakeholders.
Sardi said Blantyre and L1 Health proposed a recapitalisation to allow the group to reduce its high debt levels, the need for short-term funding and maximise the long-term strategic value of the business.
“Our board and management entered into consensual negotiations with Blantyre and L1 Health on recapitalising the company and we aim to reach agreement on the recapitalisation structure by the end of April,” he said.
Ascendis shares rose 2.04 percent on the JSE yesterday to close at R0.50.
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