African drugmaker Aspen reports 21% earnings decline due to one-off costs

By Nqobile Dludla

JOHANNESBURG, March 3 (Reuters) – South Africa’s Aspen Pharmacare on Tuesday reported a 21% fall in normalised earnings, citing one-off restructuring costs of 695 million rand ($42.48 million) incurred in its local and French sterile manufacturing facilities.

Normalised headline earnings per share fell to 574.8 cents in the six months ended December 31, while normalised earnings before interest, tax, depreciation and amortization (EBITDA) declined 13% to 5 billion rand ($305.37 million).

To cut costs, Aspen is restructuring its loss-making manufacturing facilities in France and South Africa that produce sterile drugs entirely free from living microorganisms. It incurred a one-off restructuring cost of 695 million rand, it said.

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.

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

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 and Nivedita Bhattacharjee)