DURBAN – Ascendis Health fell nearly 5 percent on the JSE yesterday after the South African-based global health and care company reported weak earnings as a result of difficult local market conditions, supply challenges and working capital constraints.

The group said its normalised earnings before interest, tax, depreciation and amortisation (Ebitda) in South Africa declined 7 percent against an 11 percent growth internationally during the six months to end December.

It said the international revenue increased to R2billion and it now accounts for 50percent of the group’s total sales, while the South African revenue declined by 1percent due to tough consumer environment and weak sentiment.

Chief executive Thomas Thomsen said the international revenue growth was driven by improved portfolio management and product launches.

“We have built on our strong customer and retail relationships to increase existing customer consumption and new customer penetration,” Thomsen said. “In South Africa, our businesses were hampered by market conditions, supply challenges and working capital constraints.”

The group said its overall Ebitda only increased by 1percent to R684million and revenue increased by 3percent to R3.96bn, while normalised operating profit declined 2 percent to R619m.

It said normalised headline earnings from continuing operations fell 6 percent to R351m, negatively impacted by higher expenses, depreciation and finance costs.

Normalised headline earnings per share declined by 10percent to 72.5cents a share. The group decided not to pay an interim dividend, with the directors opting to retain the cash to settle debt obligations.

Ascendis Health implemented a new group strategy in October last year aimed at accelerating organic revenue growth, improving cash generation and enhancing profitability. The group identified Pharma and Consumer Healthcare as the group’s new core focus areas.

Ascendis Health closed 4.66 percent lower on the JSE at R4.50 yesterday.

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