Drugmaker Aspen expects full-year double-digit profit growth after decline in first half

By Nqobile Dludla

JOHANNESBURG, March 3 (Reuters) – South Africa’s Aspen Pharmacare on Tuesday reported a 21% fall in half-year normalised headline earnings, citing one-off restructuring costs, but predicted double-digit profit growth in financial year 2026.

Normalised headline earnings per share fell to 574.8 cents in the six months ended December 31, while normalised earnings before interest, taxes, depreciation and amortization (EBITDA) declined 13% to 5 billion rand ($305 million).

To cut costs, Aspen is restructuring its loss-making manufacturing facilities in France and South Africa that produce sterile drugs. It incurred a one-off restructuring cost of 695 million rand ($42.48 million), it said.

ONGOING RESTRUCTURING

As most manufacturers prefer to produce in the United States rather than in Europe due to new U.S. tariffs, Aspen has been left with few contract manufacturing requests, CEO Stephen Saad told Reuters. This forced it to make operations leaner while it waits for new contracts. 

“Unfortunately, a lot of it is headcount,” he added, without providing a figure for layoffs. 

The restructuring is “well progressed, with the expected benefit of the cost reductions to positively impact from the second half of 2026 onwards and planned to be fully realised in financial year 2027,” the pharmaceutical firm said. 

This, along with growth from commercial pharmaceuticals, is expected to help drive double-digit growth in normalised headline earnings in constant currency during this financial year, Aspen said. 

Normalised EBITDA in the overall manufacturing business plunged by 85% to 208 million rand, with revenue down 26% in constant currency. 

Commercial Pharmaceuticals, Aspen’s most material business segment, delivered revenue growth of 4% and normalised EBITDA growth of 11% in constant exchange rates, supported by organic revenue growth across injectables, over the counter and prescription. 

Performance was supported by strong demand for Eli Lilly’s blockbuster weight-loss drug Mounjaro, which Aspen sells in South Africa, and an improved profit contribution from the reshaped business in China.

Overall, group revenue fell 4% to 21.1 billion rand.

($1 = 16.3738 rand)

(Reporting by Nqobile Dludla, Editing by Louise Heavens, Nivedita Bhattacharjee and Andrei Khalip)