Aspen Pharmacare Suffers R1.1 Bn Loss Amid Contract Dispute

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Aspen Pharmacare recorded a full‐year after‐tax loss of 1.1 billion rand in the year to 30 June 2025, a dramatic reversal from the previous year's profit of 4.4 billion rand. The principal cause of this downturn was a contractual manufacturing dispute concerning an mRNA product agreement, compounded by asset impairments amounting to 4.1 billion rand.

Revenue across the group grew marginally by 1 percent to 43 billion rand. However, manufacturing revenue plunged by 21 percent to 11.1 billion rand. Normalised EBITDA fell sharply in constant currency terms-down 62 percent to 668 million rand-largely due to disruptions in the finished dose form segment.

Experienced through a contractually mandated adjudication, the dispute and ensuing impairments severely dampened investor sentiment, prompting Aspen to cut its gross dividend by 41 percent, declaring 211 cents per share.

Earlier in the year, Aspen had flagged the dispute in an earnings warning, causing its share price to tumble by over 30 percent. Management acknowledged the issue had emerged unexpectedly after their interim results.

Despite these headwinds, Aspen's Commercial Pharmaceuticals division delivered a modest bright spot, achieving 10 percent growth in normalised EBITDA. This uplift was driven by strong performance across injectables, over‐the‐counter, and prescription segments, including sales momentum for Mounjaro in its domestic market and contributions from its Latin American product portfolio.

The group also undertook strategic cost initiatives, incurring 500 million rand in restructuring charges alongside 300 million rand in one‐off inventory write‐offs. Nevertheless, Aspen is positioning for recovery: commercial insulin production has begun at its South African sterile facility, pending approvals, and a new long‐term promotional and distribution agreement with Boehringer Ingelheim in South Africa takes effect from 1 September 2025.

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Operational restructuring is underway across its French and South African sterile facilities, aimed at aligning capacity with secured contracts to improve margins by the latter part of its 2026 fiscal year. Aspirations also include obtaining regulatory approval for Serum paediatric vaccines-with anticipated sales in 2026-and expanding GLP‐1 injectable manufacturing volumes in both South Africa and France.

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