Aspen Pharmacare reduces debt, sees share price leaping
DURBAN – Aspen Pharmacare's share price leapt 12 percent on Thursday as the market digested the JSE-listed drugmaker’s results for the year to June, released after the market closed on Wednesday.
The share price closed at R94.25.
Aspen deputy chief executive Gus Attridge said in an interview yesterday that the company had put aside the challenges of the past six months and was focused on building its anaesthetics business after it invested on capital projects in geographies like South Africa, France and Germany.
He explained that the projects were aimed at building world-class manufacturing facilities to in-source a significant portion of the production for its anaesthetics business.
“We want to secure the supply of quality anaesthetics medicines to patients across the world as we had some supply challenges in Europe.
"The facilities will enable us to supply ourselves the products and at lower costs than we are currently experiencing. This will also allow us to achieve better margins in the long run,” Attridge said.
The full commercial production from all of these projects was expected to commence in the 2024 financial year.
In South Africa the manufacturing facility is located in Port Elizabeth.
Aspen said it had managed to meet most of its short-term targets during the year, particularly reducing its debt to R39 billion, down from R53bn at the end of December.
“Our debt of R53bn was worrying the market in our six-months results and we are pleased that we have been able to reduce it by a quarter. We are going to continue on lowering it going forward,” he said.
Aspen completed the disposals of the Nutritionals business and the non-core product portfolio has allowed it to fully focus on its core pharmaceuticals business.
The group received an amount of R12.3bn from the proceeds of the Nutritionals business and a combined profit on disposal of R5.4bn. Its positive cash flows and the proceeds from the disposals enabled net borrowings to be reduced.
Going forward, Attridge said Aspen would continue to assess its operations to ensure its business was relevant to the changing macroeconomic environment.
“Adapting the business model to align with evolving circumstances has been a key strength of Aspen, moving us from a predominantly generics business to a business based on branded products with a focus on sterile injectables in recent years,” he said.