Aspen’s shares halve after weak results
Investors are concerned that the company’s borrowings, net of cash, have increased
Shares in Aspen Pharmacare plunged as much as 50% to R70 on Friday morning — the worst level in nearly nine years — after the drug maker’s interim results disappointed the market. The company's market capitalisation has now halved to R32bn. Aspen said after the market’s close on Thursday that normalised headline earnings in the six months ended December fell 9% to R3.6bn as revenues edged 1% higher to R19.7bn. Of more concern to investors is that borrowings, net of cash, increased by R6.7bn to R53.5bn. The increase was due to the weaker rand — its debts are largely in euros, deferred payments relating to acquisitions of R4.9bn and capital expenditure of R1.5bn. Deputy CEO Gus Attridge said on Friday morning that the disposal of Aspen’s nutritionals business would bring in net proceeds of about R10.4bn by the end of May. That would go towards reducing debt. “Borrowings, we believe, have peaked now,” Attridge said. CEO Stephen Saad said the group could also get “material” inflows from...
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