Adcock Ingram (AIP) H1 2025 earnings summary

Executive summary

• Revenue for the six months ended 31 December 2024 declined by 1% to R4.7 billion, with trading profit down 16.6% to R515 million and HEPS down 9.4% to 265.5 cents; dividend declared at 115 cents per share.

• Performance was impacted by weaker consumer demand, reduced inventory holdings by wholesalers, and lower production at the Wadeville facility.

• Market share increased to 6.79% (IQVIA MAT Dec 2024), up 4% year-over-year.

• Achieved Level 1 B-BBEE status and advanced ESG initiatives, including electric vehicles at the Durban distribution centre.

Financial highlights

• Revenue was R4.7 billion, down 0.6% year-over-year, with gross profit at R1.5 billion and gross margin falling from 34% to 32.6%.

• Trading profit dropped 16.6% to R515 million; operating profit fell 17% to R487 million.

• Headline earnings per share (HEPS) decreased by 9.4% to 265.5 cents.

• Net finance costs rose to R59 million, reflecting higher net debt from share buybacks, acquisitions, and increased working capital.

• Equity-accounted earnings from joint ventures increased 53–54% to R88 million.

Outlook and guidance

• Management expects improved volumes in all pharmaceutical divisions in the second half, supported by new strategies, normalization of customer order patterns, and a 5.25% SEP adjustment in February 2025.

• Winter seasonality and new rollouts in the informal sector are expected to aid consumer and OTC division performance.

• Ongoing strategic review of manufacturing facilities aims to improve efficiency and margin sustainability.

• Focus on expanding the non-price-regulated portfolio and pursuing multinational partnerships.