Earnings call transcript: Aspen Pharmacare lifts FY 2026 profit, guides for stronger 2027

Aspen Pharmacare reported a 28% increase in full-year normalized headline earnings per share to 802 cents in FY 2026. Normalized EBITDA also rose 14% to 7.7 billion rand, aided by stronger margins, reduced costs, and a significant recovery in cash flow. Free cash flow surged to 3.8 billion rand, up from just 166 million rand a year earlier.

The company's commercial pharma segment delivered a 5% revenue increase in constant currency terms, or 7% excluding China discontinuations, with EBITDA growing 13% to 5.9 billion rand. Manufacturing experienced a 10% revenue decline due to the loss of a 1 billion rand mRNA contract, but EBITDA still grew 21% to 828 million rand, thanks to cost cuts and efficiency improvements.

Aspen benefited from a major balance-sheet reset after divesting its APAC operations, which generated 28 billion rand in gross proceeds. The company is now debt-free, with a net cash position of 800 million rand at year-end.

Management expects FY 2027 EBITDA to reach at least 9 billion rand, with normalized headline earnings per share growth exceeding 50%. Commercial pharma is projected to grow mid-single-digit in both revenue and EBITDA, while manufacturing is expected to see more than 50% revenue growth, driven by the return of positive EBITDA and revenue surpassing pre-contract levels.

Growth drivers include strong sales of Mounjaro in South Africa, the rollout of generic semaglutide, WHO pre-qualification for pediatric vaccines, and an FDA approval for a triple-dose ARV manufacturing process.