{"id":836750,"date":"2025-09-03T15:45:00","date_gmt":"2025-09-03T13:45:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=836750"},"modified":"2025-09-03T15:45:17","modified_gmt":"2025-09-03T13:45:17","slug":"r1-billion-loss-for-one-of-south-africas-biggest-companies","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/836750\/r1-billion-loss-for-one-of-south-africas-biggest-companies\/","title":{"rendered":"R1 billion loss for one of South Africa’s biggest companies"},"content":{"rendered":"\n

Aspen Pharmacare, a South African-based pharmaceutical giant, has posted a loss of R1 billion amid contract issues and billions in impairments. <\/p>\n\n\n\n

Founded in 1997, Aspen is one of largest manufacturers of generic medicines in the southern hemisphere, and supplies generic medicines to over 150 countries. <\/p>\n\n\n\n

The company is one of the largest in South Africa and has a market cap of R45 billion. However, the latest financial year has been a struggle, with its share price dropping by 50%<\/p>\n\n\n\n

In its financial results for the year ended 30 June 2025, Aspen said that its manufacturing performance and intangible assets impairments have been impacted by a material contractual dispute. <\/p>\n\n\n\n

The dispute is for a confidential contract related to the group\u2019s manufacturing and technology agreement with a customer of mRNA products. <\/p>\n\n\n\n

mRNA technology is increasingly used in vaccine technology, and was utilised in the Pfizer and Moderna COVID-19 vaccines. <\/p>\n\n\n\n

Due to the consequences of the dispute and related risks, normalised EBITDA from FY 2025 of R0.7 billion in constant exchange rates was 38% of that reported in FY 2024. <\/p>\n\n\n\n

The dispute is now the subject of a contractually prescribed adjudication process. <\/p>\n\n\n\n

Moreover, the group was impacted by the retrospective implementation of global minimum tax legislation in South Africa. <\/p>\n\n\n\n

It was further impacted by an announcement by the Mauritian government of a Qualified Domestic Minimum Top Up Tax (QDMTT) of 15%, effective from FY 2025, effective from FY 2025. <\/p>\n\n\n\n

The move has impacted Commercial Pharmaceuticals’ intangible asset valuations and the group’s effective tax rates. <\/p>\n\n\n\n

Higher group effective tax rates are expected to be sustained. <\/p>\n\n\n\n

The QDMTT has materially increased the tax rate used for Commercial Pharmaceuticals brand-related intangible asset valuations. <\/p>\n\n\n\n

Financials <\/h2>\n\n\n
\n
\"\"<\/a>
Aspen CEO Stephen Saad<\/figcaption><\/figure><\/div>\n\n\n

The group said that the intangible asset impairments totalled R4.1 billion, and compromised the: <\/p>\n\n\n\n

    \n
  • DMTT related impact of R1.7 billion, <\/li>\n\n\n\n
  • The mRNA asset impairment of R0.8 billion <\/li>\n\n\n\n
  • Regional performance-related impairments of R1.6 billion <\/li>\n<\/ul>\n\n\n\n

    These impairments led to the group incurring a loss for the year of R1 billion. <\/p>\n\n\n\n

    The impairments and the increased restructuring costs have adversely impacted Aspen’s earnings per share and headline earnings per share. <\/p>\n\n\n\n

    Earnings per share declined from a positive 991 cents per share a year before to a loss of 244 cents a year later.<\/p>\n\n\n\n

    The drop in headline earnings was not as severe, but it still fell from 1,357 to 792 cents per share. <\/p>\n\n\n\n

    The group\u2019s revenue, operating profit, gross profit, and normalised profit declined over the year.<\/p>\n\n\n\n

    In a somewhat positive development, the group said that Finance costs benefited from interest rate cuts across the group’s EUR, ZAR and AUD debt pools in the second half of the year. <\/p>\n\n\n\n

    Nevertheless, the group\u2019s year-on-year finance costs have risen, driven by higher net debt levels and increased foreign exchange losses driven by US tariff-led global volatility in exchange rates.<\/p>\n\n\n\n

    The group\u2019s dividend per share was also nearly halved from 359 cents per share.<\/p>\n\n\n\n

    Key Performance Indicators (R\u2019million unless stated)<\/th>Reported June 2025<\/th>Reported June 2024<\/th>Change in reported rates %<\/th>Change in CER %<\/th><\/tr><\/thead>
    Revenue<\/td>43,363<\/td>44,706<\/td>(3)<\/td>1<\/td><\/tr>
    Gross profit<\/td>19,129<\/td>19,454<\/td>(2)<\/td>4<\/td><\/tr>
    Operating profit<\/td>1,437<\/td>6,998<\/td>(79)<\/td>(77)<\/td><\/tr>
    Normalised EBITDA(3)<\/td>9,591<\/td>11,255<\/td>(15)<\/td>(8)<\/td><\/tr>
    (Loss)\/profit for the year<\/td>(123)<\/td>5 714<\/td>>(100)<\/td>>(100)<\/td><\/tr>
    Headline earnings per share (cents)<\/td>792.1<\/td>1,356.6<\/td>(42)<\/td>(35)<\/td><\/tr>
    Normalised headline earnings per share (cents)(4)<\/td>1,055.8<\/td>1,492.1<\/td>(29)<\/td>(22)<\/td><\/tr>
    (Loss)\/earnings per share (cents)<\/td>(243.9)<\/td>991.4<\/td>>(100)<\/td>>(100)<\/td><\/tr>
    Dividend per share (cents)<\/td>211<\/td>359<\/td>\u2014<\/td>\u2014<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n
    \n","protected":false},"excerpt":{"rendered":"

    Aspen Pharmacare has recorded a R1 billion loss amid contract issues and heightened impairments. <\/p>\n","protected":false},"author":95,"featured_media":836751,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[13435],"class_list":["post-836750","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-aspen"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/836750","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=836750"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/836750\/revisions"}],"predecessor-version":[{"id":836765,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/836750\/revisions\/836765"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/836751"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=836750"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=836750"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=836750"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}