South African Equities earnings review : 31 August - 3 September 2021

A look at the earnings of Aspen Pharma , Implats, Harmony Gold, Old Mutual and Truworths

APN:SJ

APN delivered an impressive set of results for its 2021 financial year-end. The Group not only managed to slash debt by more than half but dividends were also reinstated after they were suspended in 2019 before COVID-19 changed the world. Group revenue increased by 12% to R37.8 billion. Revenue for the Commercial Pharmaceuticals segment which is comprised of Regional Brands which is responsible for their generic brands medication, and Sterile Focus Brands which is responsible for products like anesthetics reported revenue growth of 3% and 11% to R17.2 billion and R10.7 billion respectively. Demand for elective surgeries remained weak however demand for products used in COVID-19 infections acted as a buffer. Manufacturing revenue increased by 36% to R9.9 billion, however excluding supplies to counterparties of recent transactions, manufacturing revenue increased by 12%. The Group started COVID-19 sales in Q3 of FY2021 of approximately R400 million and refuse to divulge the margins earned on this product line. The company can produce 1.35 billion vaccine doses at its Gqeberha facility but only a quarter is being used now to help Johnson & Johnson's COVID vaccine. Normalised earnings before EBITDA were partially offset by better controlled operating expenses. The massive cut in the net debt was driven by the sale of the European thrombosis business, strong operating cash flows and a stronger rand relative to the euro and Australian dollar. The company’s leverage ratio is now almost half at 1.74 times, and following the improvement in the balance sheet, the Group declared a dividend of 262c per share. Click here to read more