Ascendis steps up asset sales


Ascendis steps up asset sales

Published Date: 2020-09-30 | Source: Stephen Gunnion | Author: Stephen Gunnion

Ascendis steps up asset sales

The pharmaceuticals group has appointed advisers as it accelerates the disposal of asset to reduce debt.

Ascendis Health is stepping up its asset disposal programme to maximise value from the sale of businesses and restore stability to its balance sheet. Advisers have been appointed on key proposed asset disposals, including Remedica after the sale of the Cyprus-based business fell through last year.

The pharmaceuticals group has reported a narrower full-year loss despite the impact of Covid-19. Most of its business were able to operate without restriction during the national lockdown, with its vitamins and supplements business remaining defensive due to demand for immunity support medication. Likewise, its pharma portfolio of anti-infective medication, pain management and chronic medication was also in demand. It identified new product opportunities and sources of revenue, including the provision of personal protective equipment.

Non-essential services such as Nimue, the skin brand sold through salons, were negatively impacted. Similarly, supply chain disruptions adversely impacted the operations of Chempure, the group's strategic raw material sourcing business.

International earnings for the year to end-June were boosted by the reincorporation of Remedica. In the meantime, it has disposed of Scitec International in Hungary for R100 million and Ascendis Direct Selling for R10.5 million, using the proceeds to reduce debt. Scitec is classified as a discontinued operations in its results for the year to end-June.

Group revenue rose 19% to R6.96 billion, with international revenue increasing by 28% to R3.58 billion. SA revenue came in 10% higher at R3.29 billion. It reported normalised operating profit of R161 million, up from a R1.12 billion loss last year. It recognised impairment losses of R965 million as a result of the deterioration in trading performance and the higher cost of capital. Last year's impairment losses totalled R4.4 billion. Its normalised headline loss declined to R29 million from R84 million, resulting in a normalised headline loss per share of 6c, down from 17.7c last year. It hasn't declared a dividend.

Last week, Ascendis said it had reached a deal to sell Dezzo Trading. The business procures and sells generic pharmaceuticals and over-the-counter products to government hospitals, dispensing doctors and the private sector.

Its shares fell 12% to 67c yesterday.

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