Registered users can save articles to their personal articles list. Login here or sign up here

Aspen CEO defends earnings amid post-Steinhoff share jitters

Shares in the pharmaceutical company closed 4.6% lower on the day.

Aspen Pharmacare Holdings Chief Executive Officer Stephen Saad said full-year earnings are “completely clear” and the South African drugmaker has nothing in common with scandal-hit retailer Steinhoff International Holdings.

Responding to a slump in the share price, the company said earlier Tuesday it was aware of speculation that Viceroy Research, a group of investors who published a report into Steinhoff’s accounts last month, is preparing a similar dossier on Aspen. The drugmaker has had no contact with Viceroy and “is not aware of any information of a price-sensitive nature that requires communication to shareholders,” the Durban-based company said in a statement.

The shares pared losses and closed 4.6% lower at R250.13 in Johannesburg on Tuesday, the lowest since February 2016. The stock had earlier slumped as much as 10%, the most on an intraday basis in 16 months.

“It is sad that unscrupulous operators can abuse the fear in the market for their own greed,” Saad said in a phone message that elaborated on the company’s statement. “Steinhoff is as similar to Aspen as A is to S in the alphabet.”

Sensitive market

Steinhoff shares have slumped almost 90% since the company said in early December that it had uncovered accounting irregularities and CEO Markus Jooste quit.

“The market is very sensitive” in the wake of the scandal, according to Petri Redelinghuys, founder of Johannesburg-based stockbroker Herenya Capital Advisors. Investors are going through the accounts of all companies they don’t fully understand and are looking for warning signs that Steinhoff isn’t an isolated case, he said.

Aspen has expanded aggressively through acquisition and has operations in more than 150 countries. Most recently, it agreed to buy rights to anesthetic medicines from U.K.-based AstraZeneca Plc for at least $555 million.

“We have been loath to issue shares and have repaid all acquisitions through cash earnings,” Saad said. “We have a two-decade track record of cash earnings matching operating earnings.”

In a July interview, Saad said the company had decided to change the way it reports earnings by categorising performance based on type of pharmaceutical and geography. That followed criticism from the analyst community, he said at the time.

Trading in the current fiscal year is in line with the prospects reported in the full-year earnings statement published on September 14, Aspen said in Tuesday’s statement.


To comment, you must be registered and logged in.


Don't have an account?
Sign up for FREE

Let’s hope these newest statements of CEO Saad of Aspen can be trusted and stands the test of time. At least Saad understands the importance of swift response and communication with the market.

The statements of Markus Jooste during 2017 when he was still CEO of Steinhoff International proofed to be unreliable and false. Proper, informative communication from the new board of SNH has at best been sparsely and questionable.

The market stance of late is whether the boards of big companies can be trusted?

You drink your first coffee of the day, look at your emails and this email from Viceroy Research pops up – pay us $10 million or we publish a report on you. The problem you face now, is that it is way too early to drink a whiskey.

I sold my entire ASPEN holding in July 2016. I could not understand why Aspen reports in billions – not even Naspers does it and NPS is the biggest share in the JSE – so I got out.

Do you know how many corpses you can hide when reporting in R Billions partuicularly in the rounding? MANY !!!

Aspen has over extended itself and did not give itself time to settle down its acquisitions – it just keeps on growing – just like Steinhoff, not that I am implying that there is anything sinister like Steinhoff; I just ceased to understand Steven Saad’s reasoning (of greed perhaps?).

I really begin to worry, is there a concerted effort out there to destroy South African Multi-national companies.

Should all South African outfits that went international be worried.

What can they do?

can’t they collectively employ an international auditor to investigate if there is no conspiracy against our success on the global arena?

Just my thoughts….

The other view is that these are market raids, and that people are using these opportunities to build equity stakes at fire-sale prices, because in fact they think the long-term potential is good.

I consider that these are raids.
Provides good buying opportunities, though.

Load All 6 Comments
End of comments.





Follow us:

Search Articles:Advanced Search
Click a Company: