Ascendis debt mars first-half performance

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Ascendis debt mars first-half performance

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Published Date: 2021-04-01 | Source: Stephen Gunnion | Author: Stephen Gunnion

Ascendis debt mars first-half performance

The pharmaceuticals and healthcare group reported an interim loss despite a strong operational performance.

Ascendis has reported a strong first-half operational performance but has slumped into a significant loss due to a surging debt bill. It now has 30 days left to agree to a plan to reset its balance sheet or risk going into business rescue.

Remedica, the Cyrus-based generics business that Ascendis had planned to sell before the company's creditors stood in the way of the disposal, was the standout performer in the six months to end-December, growing revenue by 42%. That drove a 35% improvement in international revenue, while SA revenue increased by 30%, supported by a 59% rise in revenue at its Medical Devices business. The company said Medical Devices benefitted from its supply of high-demand ventilators, respirators and testing products during the Covid-19 pandemic. The benefit of these Covid-19 related sales was partly offset by restrictions on elective surgeries in hospitals and fewer trauma cases during the lockdown period.

Group revenue rose 33% to R4-billion while normalised operating profit grew by 27% to R486-million. Normalised earnings before interest, tax, depreciation, and amortisation (Ebitda) increased by 50% to R794 million. However, net finance costs more than doubled to R545 million as debt rose. Its tax expense rose R125-million while impairment losses totalled R246-million. That resulted in a normalised headline loss of R43-million for the six months, down from a R138-million profit in the previous year.

Ascends said it was working to reach a consensual agreement on a balance sheet recapitalisation with a lender consortium, controlled by Blantyre and L1 Health, by the end of April That may result in it exchanging stakes in its underlying businesses in return for reducing net debt, which totalled R6.6-billion at the end of December. If agreement is reached, shareholders will get to vote on the recapitalisation agreement.

In the meantime, Ascendis said it continued to make progress with the disposal of non-core assets. In the six months to December, it divested Scitec International in Hungary for R90-million and Ascendis Direct Selling for R10.5-million. Earlier this month, it sold its pharma tender and dispensing doctor business, Dezzo Trading. The disposal of the Animal Health and Biosciences businesses were both in advanced stage negotiations, it said.

The company's shares closed 2% up at 50c yesterday.





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