PORT Elizabeth-based Aspen Pharmacare‚ the JSE's biggest pharmaceutical group by market capitalisation‚ yesterday reported a 17% increase in headline earnings per share to 371.1c for the six months ended December.
Normalised diluted headline earnings per share were up 23% to 379c.
Revenue from continuing operations rose 20% to R9-billion‚ while operating profit from continuing operations was 24% higher at R2.5-billion.
The company said the South Africanbusiness maintained its momentum from the second half of the prior year‚ raising revenue by 23% to R3.6-billion and improving operating profit before amortisation‚ adjusted for specific non-trading items‚ by 14% to R960-million.
Revenue in the pharmaceutical division increased 24%‚ buoyed by organic growth‚ well-performing new products and an upswing in antiretrovirals (ARVs) sold under public sector tender. More expensive raw materials due to the weakening rand and a greater weighting towards low-margin ARVs resulted in margins in the pharmaceutical division tightening despite gains in production efficiency.
The consumer division increased revenue by 17%‚ led by impressive advances from Infacare‚ Aspen's infant milk formula brand.
Consumer margins were also squeezed by the higher costs of imports.
Capital projects are under way at each of Aspen's South African manufacturing sites‚ which are designed to add capacity and technology.
Aspen has authorised the construction of two high-containment suites‚ one for hormonals and one for oncolytics‚ at its Port Elizabeth site.
The suites are for oral solid-dose products requiring containment due to the risks associated with long-term exposure to these drugs during the manufacturing process.
The Asia-Pacific business maintained continuous growth‚ lifting revenue by 18% to R3.4-billion and growing operating profit before amortisation‚ adjusted for specific non-trading items‚ by 29% to R949-million.
Revenue growth was achieved in Australia‚ the dominant contributor to this territory‚ despite mandatory price cuts imposed by the regulator. A key growth driver was new products secured through acquisitions.
The international business increased revenue by 22% to R1.8-billion and expanded earnings before interest‚ tax and amortisation (ebita) by 33% to R604-million.
The Latin American region was the greatest contributor to the revenue advancement due to a combination of organic and acquisitive growth.
In line with Aspen's goal of extending its footprint in Latin America‚ a subsidiary was established in Argentina during the period.
In addition to the revenue growth achieved in this territory‚ ebita was also lifted by improved margins in the global brands portfolio.
Gross revenue from sub-Saharan Africa rose 19% to R1-billion after increased promotional activity bore fruit. An even better performance was inhibited by political unrest in both Nigeria and Kenya‚ two leading markets in the territory.
Looking ahead‚ the group said the Asia-Pacific business was expected to replace South Africa as the largest revenue generator by the end of the 2013 financial year as sales from the classic brands added impetus to the second-half performance.