Aspen delivers strong FY performance
Multi-national pharmaceutical group, Aspen, has written a healthy dividend prescription to its shareholders for the year ended June. It ramped up manufacturing capacity and strong underlying volumes contributed to a jump in Headline earnings per share by 30 per cent and maintained revenue levels by a marginal 2 per cent. Stephen Saad, Aspen Group Chief Executive CNBC Africa joins for more.
Wed, 31 Aug 2022 16:07:56 GMT
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AI Generated Summary
- Efficient manufacturing and tight control on operating costs drove double-digit earnings growth for Aspen Group.
- The company is exploring strategies to counteract rising freight costs and manage energy generation effectively to sustain operational efficiency.
- Growth prospects in divisions such as South Africa, Latin America, and Europe look promising, despite uncertainties in regions like Russia and China posing risks to future performance.
Pharmaceutical giant Aspen Group has reported a robust financial performance for the year ended in June, delivering a healthy dividend to its shareholders. The company saw a significant jump in headline earnings per share by 30% while maintaining revenue levels with a marginal 2% increase. Stephen Saad, the Aspen Group Chief Executive, attributed the success to the team's efforts, particularly highlighting the impact of ramping up manufacturing capacity and strong underlying volumes in driving double-digit organic growth in normalized EBIDAR operating profit. Saad acknowledged the challenges faced by the company, such as the impact of the China and Russia markets being affected due to lockdowns and war, respectively. However, regions like Australia and Latin America helped bridge the gap to achieve overall growth. He emphasized the efficiency gains in manufacturing and tight control on operating costs as key contributors to the impressive earnings growth. Despite facing significant cost increases, particularly in freight, Saad expressed concerns about the sustainability of absorbing these costs without affecting margins. The company is working on strategies to counteract the ongoing challenges in freight costs which are expected to remain stubborn. Saad also noted the impact of energy generation on manufacturing capabilities, highlighting the importance of managing energy consumption effectively amid the dynamics of the energy market. Aspen Group's increased investments in manufacturing capabilities, particularly in South Africa, necessitate a strategic approach to energy generation to ensure optimal operations. The company is exploring alternative options like waste-to-energy generation and working on enhancing operational efficiency to secure a stable energy supply for its critical manufacturing operations. Looking ahead, Saad discussed the growth prospects in various divisions and geographies for Aspen Group. He forecasted strong growth in South Africa following recent investments and identified Latin America and Europe as regions with promising performance. However, uncertainties in regions like Russia and China pose risks to the company's projections, with China's market volatility due to lockdowns impacting Aspen's hospital-based business. Despite the challenges posed by global events, Aspen remains optimistic about sustaining its growth momentum, with a focus on leveraging its manufacturing capabilities and strategic investments to navigate the evolving market landscape.