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South Africa's largest pharmaceutical company on Tuesday reported a 21% decline in normalised headline earnings for the six months ended Dec. 31, dragged down by one-off restructuring costs at its sterile manufacturing facilities. But CEO Stephen Saad told investors the pain is temporary, and that double-digit profit growth is coming before the financial year is out.
Normalised headline earnings per share fell to 574.8 cents in the period. Normalised earnings before interest, taxes, depreciation and amortisation dropped 13% to 5 billion rand ($305 million). Group revenue slid 4% to 21.1 billion rand.
The headline number is ugly. The explanation, Aspen says, is straightforward.
The company is cutting its way through loss-making manufacturing operations in France and South Africa, both of which produce sterile drugs. That process cost Aspen a one-off charge of 695 million rand ($42.48 million) in the period.
The root cause, Saad told Reuters, is U.S. trade policy. As tariffs have made American manufacturing more attractive, contract manufacturers that once relied on European facilities have shifted production stateside. Aspen was left with empty order books and oversized operations.
"Unfortunately, a lot of it is headcount," Saad said, without specifying how many jobs would be cut.
The restructuring is described as well progressed. Cost savings are expected to start flowing through in the second half of 2026, with the full benefit landing in the financial year 2027. In the manufacturing segment, normalised EBITDA collapsed 85% to 208 million rand, with revenue down 26% in constant currency terms.
Away from manufacturing, Aspen's commercial pharmaceuticals business held up well and is doing most of the heavy lifting.
The segment, the company's largest by revenue, grew sales 4% and expanded normalised EBITDA by 11% in constant exchange rates. Gains were spread across injectables, over-the-counter products and prescription drugs.
Two factors stood out. Demand for Mounjaro, Eli Lilly's blockbuster weight-loss injection that Aspen distributes in South Africa, provided relevant support. So did a recovering business in China, which has been reshaped over the past two years and is now contributing more to the bottom line.
