Aspen holds back on dividend in response to Covid-19 uncertainty
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DURBAN - ASPEN Pharmacare has decided to withhold the dividend payment in the year to end June in response to the uncertainty caused by the Covid-19 outbreak.
The global pharmaceutical company said yesterday that its board decided it would not be prudent to declare a dividend at this time.
“The board will re-evaluate the circumstances regularly with a view to declaring a dividend when it is considered prudent to do so,” the group said.
In the results released after the close of the market yesterday, Aspen reported a 9percent increase in revenue to R38.6billion for the year to end June, boosted by a 14percent increase in revenue in its manufacturing segment, despite the uncertainty caused by the Covid-19 outbreak.
Its normalised earnings before interest, tax, depreciation and amortisation was up by 7percent to R11bn.
“Our relevant product portfolio, effective business continuity plans and safety measures to protect our employees have enabled us to remain in full operation throughout this period. We are most proud of the commitment shown by all of Aspen's employees, with special gratitude to those at the production sites, for ensuring we have been able to maintain the supply of essential medicines to Covid-19 and other patients around the world under these circumstances,” the group said.
Aspen experienced the effect of the pandemic in the second half of its financial year.
Normalised headline earnings per share increased by 9percent to 1465cents a share, benefiting from lower financing costs.
Aspen reduced its net debt by R3.8bn to R35.2bn at the end of the period, down from R39bn compared to last year after exiting some of its operations.
This comes after the group announced the sale of its European thrombosis business to Mylan for 641.9million (R12.76bn), with the proceeds earmarked to reduce debt.
Its commercial pharmaceuticals segment, which comprises Aspen’s regional brands and sterile focus brands, grew revenue by 1percent to R31.1bn while regional brands revenue increased by 3percent to R16.9bn and said revenue was adversely impacted by reduced demand during the lockdown period.
Sterile focus brands revenue increased by 1percent to R14.3bn, primarily due to the lost sales in China during the hard lockdown period.
Manufacturing revenue increased by 14percent to R7.5bn, benefiting from the increase in sale of heparin and non-heparin based active pharmaceutical ingredients to third parties.
Looking ahead, Aspen said that while the underlying business had demonstrated a good performance in the past year and was well-positioned for the momentum to continue, the uncertainty created by the enduring unfavourable influence of Covid-19 was likely to affect results in the year ahead.