Business

International expansion boosts Aspen

9 September 2009

Africa's largest pharmaceutical manufacturer, Aspen, produced a healthy set of results for the year ended 30 June 2009.

In a statement on Wednesday, the JSE-listed group said its revenue had increased by 80% to R8.450-billion as international business expanded.

Group operating profit improved by 82% to R2.183-billion, while group headline earnings per share grew by 68% to 389.4 cents.

"Prevailing global economic conditions did little to deter the strength of the group's performance, with the South African and Australian businesses continuing to perform well."

The group said its international expansions resulted in substantially increased contributions from the offshore businesses, delivering an operating profit of R1.076-billion.

"The group's international operations delivered positive results, delivering an increased contribution to earnings of 47% up from 15% last year," said Aspen group chief executive Stephen Saad.

"The South African business has achieved excellent growth and has increased its contribution to earnings by 14%, while retaining its position as the market leader in the pharmaceutical sector and improving its market share in all market segments."

Aspen's South African business remained the market leader in the total private pharmaceutical market, the private generic market, the public sector pharmaceutical market, and in the supply of antiretrovirals (ARVs) to both the private and the public sectors, the company said.

Campbell Belman's independent Confidence Standing Survey of 42 over-the-counter (OTC) companies in 146 top retail pharmacies again ranked Aspen as the top OTC company for the fourth time in the past six years, the group said.

Aspen said its South African business increased revenue by 30% to R4.868-billion amid difficult trading conditions.

"Restrictive factors such as accelerated raw material prices, production inflation and legislated fixed Single Exit Prices (SEP) impacted returns in the first half," it said.

The group said a margin improvement was seen in the final quarter as a consequence of the health department's 13.2% increase in SEP in February 2009 and the implementation of the state tender price adjustment mechanism.

According to Aspen, the group's international expansion had been driven by acquisitions in Brazil, Mexico, Venezuela, Tanzania, Kenya and Uganda over the last 18 months.

With effect from 30 June 2008, the group's intellectual property portfolio in international markets was significantly enhanced by the acquisition of four globally branded products, Eltroxin, Lanoxin, Imuran and Zyloric from GlaxoSmithKline, for 170 million pounds, Aspen said.

The global product range was also supplemented by two licensing transactions for branded products with US-based Iroko Pharmaceuticals.

Aspen said its products were now distributed to more than 100 countries across the world.

Earlier this year, the group announced it had entered into several transactions with GlaxoSmithKline.

"The material conditions precedent which remain to be fulfilled are in respect of the approval of the Exchange Control Department of the South African Reserve Bank and competition filings in international markets," Aspen said.

It was anticipated that the GlaxoSmithKline transactions would be completed before the end of 2009.

Sapa