Aspen Pharmacare Holdings Limited

For the first half of 2026, revenue was around ZAR 21 billion, down 4% year over year. Normalized EBITDA was just over ZAR 5 billion, down 13% from ZAR 5.8 billion, and normalized headline earnings were ZAR 5.75, down 21% from ZAR 7.24. Group gross profit margin declined to 45.4% from 47.6%, while commercial pharma gross margin stayed at 58.5% and its EBITDA margin rose to 29.2% from 28.3%. Cash from operations was ZAR 3.6 billion, CapEx was ZAR 1.6 billion versus ZAR 2.6 billion a year ago, free cash flow was just under ZAR 2 billion, and net debt was ZAR 28.6 billion versus ZAR 31.2 billion in June 2025. Management said it expects a stronger second half, double-digit normalized earnings growth, commercial pharma revenue growth in the single digits with double-digit EBITDA growth, manufacturing EBITDA to be in line with the prior year, and APAC sale proceeds of over ZAR 25 billion to be used primarily to reduce debt.

Stephen Saad’s message was that Aspen is in a reset phase focused on controllable drivers: commercial pharma growth, GLP-1 rollout, manufacturing restructuring, and unlocking value through the APAC divestment. He said the company is being more disciplined about capital, wants to preserve the profitable parts of the business, and expects the restructure to show through in H2 and fully in FY27. His tone was confident and candid, especially on underperforming manufacturing and on his view that the market is undervaluing the group.

Sean Capazorio focused on the numbers behind the turnaround: revenue down 4%, EBITDA down 13%, and headline earnings down 21%, with the manufacturing contract loss driving most of the decline. He highlighted stronger cash conversion, noting operating cash flow of ZAR 3.6 billion, CapEx down to ZAR 1.6 billion, free cash flow of just under ZAR 2 billion, and net debt reduced to ZAR 28.6 billion even after a ZAR 0.9 billion dividend. He also emphasized stable commercial pharma gross margins, rising EBITDA margin to 29.2%, and the APAC transaction timeline, with gross proceeds around AUD 237 million and net proceeds expected above ZAR 25 billion.

Analysts asked how much of commercial pharma growth came from GLP-1 commercialization and how generics could affect the South African market. Stephen said Mounjaro is positioned differently from cheaper GLP-1 products, with generics more likely to pressure Ozempic and Wegovy than Mounjaro, and that lower-priced versions could open a broader patient base, possibly even in South Africa’s public sector. On balance sheet value and ROIC, management acknowledged that return on invested capital has been disappointing and said the APAC sale should improve it, while also arguing Aspen’s asset mix and divestment activity make simple formulas less representative of the business.