Aspen Pharmacare, Africa’s biggest drugmaker, missed forecasts with an almost one-third rise in full-year profit on Wednesday as a weak South African home market offset contributions from recent acquisitions.
Aspen, which supplies drugs to about 150 countries that include Australia, Nigeria, Brazil and the United States, said diluted headline EPS totalled 10.16 rand for the year to the end of June, compared with 7.87 rand a year earlier.
That was below the 10.71 rand estimate in a Reuters poll of 12 analysts.
Headline EPS, the most widely watched profit measure in South Africa, strips out certain one-off items.
Sales jumped 51 percent to 31.4 billion rand ($2.87 billion) with sales from its South Africa business flat while acquisitions resulted in revenue more than tripling in Europe and Latin America.
Domestic rival Adcock Ingram posted a hefty nine-month loss last month, as a weaker rand currency pushed up imported raw materials costs that regulated price increases are often not sufficient to fully recover.
Unlike Adcock, which makes virtually all of its profits in a heavily regulated home market, Aspen has made an aggressive push into overseas markets to benefit for patent expiries on some of the best-selling name-brand drugs worth billions of dollars.
But that string of deals has jacked up its borrowings, putting its net debt to EBITDA at nearly 3.3 times — slightly above its stated target of less than 3 times.
Last year, Aspen spent around 20 billion rand in the past year buying business such as Merck & Co. Inc’s factory plant in the Netherlands and thrombosis drugs from GlaxoSmithKline.