Aspen FY Numbers - A New Focus

The South African pharmaceutical giant Aspen reported a strong set of full-year numbers, even though Covid-19 was a net drag on their earnings. Contrary to popular opinion, Dexamethasone was a non-event in these numbers and if you bought Aspen shares on just this one drug, you would've quickly learnt that you made a bad mistake.

Aspen reported revenues of R38.6 billion up 9% year-on-year, headline earnings were also up 9% to R14.65 per share. The Commercial pharma division that sells oral medicines and injectables now contributes just over 84% of the groups revenues. The fastest growing division was the manufacturing division.

The Durban-based pharma company also announced that it is going to be exiting slow growing developed markets and expand their business in fast-growing emerging markets. They plan to execute this new strategy through a mixture of organic growth, where they already have a strong presence, and acquisitions in new territories.

This now explains the R12.7 billion disposal of the European thrombosis business to US pharma company Mylan while still keeping it in emerging markets. Here at home in sub-Saharan Africa, Aspen has a 22% market share which we expect to see increase in the medium to long-term as they execute on the new emerging markets focused strategy.

Other countries of focus will include China, Australia, and South America. Aspen has done an exceptional job in reducing its debt levels, which has come at a cost of rationalising the business as well and focusing on fast growing drugs and divisions. Let's see if this new strategy is the right prescription, since the old one was a bitter pill to swallow.