South African pharma giant takes R700 million hit

Aspen Pharmacare has reassured shareholders that a lacklustre performance in the first half of its 2026 financial year will set the company up for success in the second half.

The pharmaceutical giant took some notable hits in 2025, which have impacted its 2026 results. Despite this, the company is confident that the current financial year will deliver on expectations.

On Wednesday, 11 February 2026, Aspen released a business update outlining its performance in the first half of its 2026 financial year, which spans the six months ended 31 December 2025.

In this update, the company also outlined its anticipated prospects for the full year ending 30 June 2026.

Aspen described its first-half performance as “encouraging”, saying its results were supported by continued strong momentum in its Commercial Pharmaceuticals and solid progress in the reshaping of its sterile finished dose form (FDF) manufacturing facilities in South Africa and France. 

However, this period also saw one-off restructuring costs of around R700 million relating to these sterile FDF manufacturing facilities, which negatively impacted the company’s interim earnings.

Aspen explained that the first half of the 2026 financial year should be seen as “transitional”, with a stronger performance expected in the second half of the year.

This second-half turnaround will be driven by the benefits flowing from operational improvements and reshaping within Aspen’s manufacturing division.

Aspen also pointed out that its first-half performance was influenced by a high base in the prior year, with the first half of its 2025 financial year having benefitted from an mRNA manufacturing contract worth around R1.5 billion.

This contract was later cancelled following a dispute, with the counterparty paying Aspen around R500 million.

These settlement proceeds were received in the first half of Aspen’s 2026 financial year, but were not enough to offset the high base initially created by the contract proceeds.

However, from an operational perspective, Aspen’s first-half performance was strong.

The company’s most material business segment, Commercial Pharmaceuticals, delivered 4% revenue growth and double-digit normalised EBITDA growth.

Aspen noted that this was largely driven by strong demand for weight-loss drug Mounjaro in South Africa, as well as an improved profit contribution from its reshaping efforts in China.

In addition, the company reported that its Manufacturing business achieved a positive EBITDA in the first half, aided by the dispute settlement proceeds.

“The reshaping of the loss-making sterile FDF manufacturing facilities in South Africa and France is well progressed with the expected benefit of the cost reductions to positively impact from H2 2026 onwards and planned to be fully realised in FY 2027,” the company said.

Overall, Aspen expects its earnings for the first half of its 2026 financial year to change as follows compared to H1 2025– 

• Earnings per share – decrease by between 41% and 36%
• Headline earnings per share (HEPS) – decrease by between 38% and 33%
• Normalised HEPS – decrease by between 24% and 19%

Despite these decreases, Aspen reassured shareholders that its guidance for the full 2026 financial year remains on track.

This includes double-digit growth in normalised HEPS, and its Commercial Pharmaceuticals business is projected to deliver mid-single digit revenue growth.

Aspen plans to release its results for the six months ended 31 December 2025 on Tuesday, 3 March 2026.