Aspen’s operating profit plunges 79%

Aspen Pharmacare has reported a loss for the year ended 30 June 2025, as operating profit plunged 79% to R1.4 billion from R7 billion a year earlier. Group revenue declined 3% to R43.4 billion, while normalised Ebitda fell 15% to R9.6 billion.

Headline earnings per share (Heps) dropped 42% to 792.1 cents, with normalised headline earnings per share (Nheps) down 29% to 1 055.8 cents. Earnings per share (EPS) swung to a loss of 243.9 cents, compared to 991.4 cents in the prior year.

The group also recognised a R4.1 billion loss in intangible asset impairments and restructuring costs tied to its Chinese operations. A dividend of 211 cents per share was declared, down from 359 cents in 2024.

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Aspen maintained a strong operating cash conversion rate of 147%, above its 100% target, while net debt rose slightly to R31.2 billion.

Commercial Pharmaceuticals, which contributes more than 70% of group revenue, delivered 10% growth in revenue and normalised Ebitda in constant exchange rates, supported by organic growth across injectables, over-the-counter (OTC) and prescription medicines. The segment also benefited from the South African launch of weight-loss medicine Mounjaro and the addition of acquired products in Latin America.

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Manufacturing hit by contractual dispute

The Manufacturing division, however, recorded a steep decline. Normalised Ebitda fell 62% to R668 million due to a contractual dispute with a manufacturing customer in the mRNA segment. The group previously warned this dispute could reduce normalised Ebitda by R2 billion compared to guidance. The matter is now subject to adjudication.

Aspen also finalised the restructuring of its Chinese business following the integration of acquired Sandoz operations, at a cost of about R0.5 billion, alongside R0.3 billion in one-off inventory rationalisation. The group expects margins in China to normalise in 2026.

Tax changes weigh on earnings

Additional headwinds came from the implementation of global minimum tax rules. The Mauritian Qualified Domestic Minimum Top-Up Tax, combined with South African measures, increased the group’s effective tax rate and contributed R1.7 billion to intangible asset impairments.

Outlook for 2026

Looking ahead, Aspen expects mid-single digit organic revenue growth and stronger Ebitda growth from Commercial Pharmaceuticals in 2026, supported by its reshaped China operations and further growth from Mounjaro.

The group projects double-digit growth in normalised headline earnings for 2026, with stronger gains expected in the second half as manufacturing recovers.

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