Cape Town – South African pharmaceutical giant Aspen Pharmacare expects earnings from its manufacturing operations to more than double to over R1.66 billion in the 2027 financial year, as chief executive Stephen Saad seeks to turn underperforming factories into major profit drivers.
According to Billionaires.Africa, the company is targeting manufacturing earnings before interest, tax, depreciation and amortisation (EBITDA) of more than $100 million, following a 21% increase to R828 million in the financial year ended June 2026.
The forecast follows a restructuring of Aspen’s sterile manufacturing facilities in France and South Africa after the loss of a major contract to produce messenger RNA (mRNA) products. The contract had contributed approximately R1 billion to manufacturing EBITDA in the previous financial year.
Aspen said changes to its operations generated about R1.2 billion in earnings improvements during the 2026 financial year, more than offsetting the lost contract revenue.
Strategic shift
According to Business Day, the group expects its sterile finished-dose manufacturing business, which produces injectable medicines, to become profitable at EBITDA level during the current financial year.
Saad has described the recovery as a strategic shift, telling analysts: “We might have lost the milk, but we didn’t lose the cow, and we’re in a good neighbourhood,” Business Day reported.
The turnaround is expected to be supported by increased factory utilisation, new production contracts and expanded pharmaceutical manufacturing. At its Gqeberha facility, Aspen began commercial production of human insulin vials in May under an agreement with Danish drugmaker Novo Nordisk, while additional vial and cartridge production lines are being tested.
The insulin project could strengthen Aspen’s manufacturing business while contributing to efforts to expand access to diabetes treatment in Africa. The Associated Press previously reported that the partnership was intended to increase local insulin production for African patients.
Expansion plan
Aspen is also exploring paediatric vaccine opportunities and expects its active pharmaceutical ingredients business to return to growth, according to Business Day.
The manufacturing recovery forms part of a broader earnings expansion plan. Aspen is targeting normalised group EBITDA of at least R9 billion for the 2027 financial year, compared with R7.7 billion in 2026.
Reuters reported in September that Aspen’s improving manufacturing performance and strong demand for weight-loss and diabetes drug Mounjaro had helped lift its annual earnings, despite flat group revenue.
The company also expects approximately R1.2 billion in net interest cost savings following the sale of its Asia-Pacific business, excluding China, which generated gross proceeds of R28 billion.
However, the manufacturing recovery will depend on Aspen securing sufficient production volumes to use its factory capacity more efficiently and sustaining the benefits of its restructuring.
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Compiled by Betha Madhomu
