Outgoing Ascendis CEO Karsten Wellner. Picture: TREVOR SAMSON
Outgoing Ascendis CEO Karsten Wellner. Picture: TREVOR SAMSON

Ascendis Health is hoping that the government holds firm on its commitment to pay suppliers within 30 days, says outgoing CEO Karsten Wellner.

The state owes Ascendis R140m for medical devices alone, according to Wellner. About R100m of that was due 90 days ago or more.

President Cyril Ramaphosa said failure of some government departments to pay suppliers within 30 days would be addressed because "the culture of late payment has gone on for far too long and has caused far too much damage, particularly to emerging black businesses".

Wellner said while the state often paid Ascendis late, it had never failed to pay entirely.

"We’ve never had to write off government debt," he said. And since the budgets of insurers and state entities often ran until the end of February, they tended to pay large chunks of their debts in March and April.

"So we should get a good follow-up and see some improvement in the cash flow, even if Cyril Ramaphosa’s focus on improving payments [yields nothing]. Naturally we should see a better inflow in March and April from government’s side."

Improved cash flows will help Ascendis pay off its debt, much of which stems from its offshore acquisition spree in recent years.

Wellner said Ascendis planned to reduce its debt:ebitda (earnings before interest, taxes depreciation and amortisation) ratio from 3.5 to about three within the next 18 months.