- South African group looks to expand infant nutrition overseas
- Shares gain most in almost four months in Johannesburg trading
Aspen Pharmacare Holdings Ltd., Africa’s largest generic-drugs maker, is looking for acquisitions and seeking to expand its infant nutrition business after international sales boosted full-year profit.
The Durban, South Africa-based company, which supplies medicines in more than 150 countries, is seeking purchases in China, Japan and Southeast Asia, Deputy Chief Executive Officer Gus Attridge said by phone on Wednesday. While Aspen “won’t walk away from any great opportunity,” the company is seeking to expand its infant-milk, anti-coagulant and women’s-health units, he said.
The company has spent more than $2 billion on acquisitions from drugmakers including GlaxoSmithKline Plc and Merck & Co. in the past three years to boost its portfolio of medicines and manufacturing sites. London-based Glaxo took a stake in the company’s Japanese unit in October to boost operations in that country. Talks to buy a infant-nutrition business, made public in May, have been called off without a deal, Attridge said.
Net income climbed 3.9 percent to 5.2 billion rand ($380 million) in the year through June, Aspen said in an earlier statement. That compares with a 5.16 billion-rand estimate of six analysts surveyed by Bloomberg. Sales increased 22 percent to 36.1 billion rand, boosted by a 46 percent gain in international revenue.
The stock was 0.3 percent higher at 327 rand at 4:15 p.m. in Johannesburg, maintaining the loss for this year at 20 percent. It earlier climbed as much as 4 percent, the steepest intraday gain in almost four months.
Profit margins at the South African unit were pressured by “ongoing weakening of the rand relative to the U.S. dollar as well as high wage and energy-cost inflation,” Aspen said. Increased sales of low-margin antiretroviral drugs to South Africa’s government also suppressed margins, Attridge said.
In May, the company agreed to sell a drugs business to Dublin-based Endo International Plc for about $130 million and two pharmaceutical portfolios to units of Strides Arcolab Ltd. of India for $301 million. The majority of the proceeds have been earmarked for acquisitions, he said.