Aspen Pharmacare is looking to expand its infant milk formula business into Saudi Arabia, its deputy chief executive said after the company reported a 26 percent rise in first-half profit.
Aspen has been strengthening its business in emerging markets following the launch of its Alula infant milk formula brand in China last year, which is the world’s biggest consumer of infant milk formula products.
Its infant nutritional business, which supplies a wide range of infant nutritional and children’s milk products, has a presence in Australasia, Latin America and Sub-Saharan Africa and a growing presence in China.
“We’ve started some very small test sampling of the markets in the Middle-East where Saudi Arabia is a particularly attractive market,” group deputy chief executive Gus Attridge told Reuters after the company published results on Thursday.
“Saudi Arabia has a reasonable population size and excellent buying power so it’s a very wealthy country,”
In January, Aspen said it would review the infant milk formula business with options including a sale to a strategic partner. Attridge said he expected to get a report back on these options within six months.
Aspen, which counts developed Europe as its biggest revenue generator, said normalised headline earnings per share (HEPS) for the six-months ended December 31, rose to 872 cents from 692 cents, buoyed by a strong result from therapeutic focused brands and positive performance of the pharmaceutical business in its home market.
HEPS is the main profit gauge in South Africa, which strips out certain one-off items.
Group revenue grew 11% to R21.9 billion ($1.85 billion) from R19.8 billion.
Therapeutic focused brands comprising the Anaesthetics, Thrombosis and High Potency and Cytotoxic portfolios, delivered revenue of R9.9 billion, contributing 45% of total group revenue.
Sub-Saharan Africa was the primary growth driver in regional pharmaceutical brands, underpinned by the South African business which raised revenue 21%.
Aspen’s shares were up 2.78% to R264.15 by 1227 GMT.
“The sales achieved in the first half of the 2018 financial year are expected to be maintained in the second half in spite of the continued supply constraints which will prevent realisation of full potential,” Aspen said.
It also said performance in the second half would benefit from the additional rights to the AstraZeneca Anaesthetics , which it acquired in October.