Aspen says management comments taken "out of context"

Aspen's Port Elizabeth manufacturing plant. The company says that earnings might be lower than expected in the second half after few government tenders were won. Image: Thembela Architects

At a pre-closed period conference call with investors, two of Aspen's executive directors‚ who hosted the call‚ were reported as telling analysts that the company's second-half trading results would be weaker.

But South Africa's largest drug manufacturer said that the directors told investors of the company's general comfort with the potential increase in group revenue in the second half of the financial year ending June as a result of recent acquisitions.

"The statement that revenue from its South African operations would be lower in the second half of 2014 because of lower than expected government tender volumes was correct‚" the company said.

Revenue from South Africa was R3.8bn in the first half of this year‚ comprising 30% of the group's gross revenue.

"The reference to a disappointing second half in South America because of problems with the supply chain had no basis‚" the company said. Although it did identify Latin America as the region where this was had happened.

"Management reported that supply problems relating to a few products in the portfolio of products recently taken over from Merck had resulted in the full potential of these products not being realised‚" Aspen said.

The local drug manufacturer‚ which supplies medicines to 150 countries signed a R10bn deal with Merck to buy an active pharmaceutical ingredient plant and 11 related products in The Netherlands last year.