07 Jul 2020

ASPEN RECOVERY

Aspen has recently been in the news due to its ownership of the rights to a treatment that may be helpful in the fight against the COVID-19 pandemic.

The pharmaceutical giant has had a renewed boost of its reputation over the last month after the group fell from grace in the last few years. Its heightened popularity is related to the group’s ability to produce a medication (dexamethasone) that may be helpful in the fight against COVID-19.

The group confirmed that it owns the rights to dexamethasone and currently distributes the medication in several countries. In a trading update in May, the group also said it has seen increased demand for some of its products in Europe due to the pandemic, as well as stocking piling of healthcare products and advanced filling of prescriptions.

The recent news coincides with a turn in fortunes for the company, which has seen its share price fall more than 50% over the last 3 years. The group has been selling non-core assets over the last year in order to reduce its debt levels. The divestment in its Japanese operations earlier this year for around R4.4 billion is part of this strategy, as well as a strategy to focus the business on the core pharmaceuticals business in markets where the group has an edge.

02 Jul 2020

TELKOM’S SIGNAL WAVERS

Telkom recently announced a drop in financial performance, as the group takes measures to future-proof itself in the face of a changing telecommunication landscape.

Recent results revealed that the group experienced a tough year. Although the group was able to grow revenue, headwinds including a decline in its fixed-line business as well as one-off items weighed on overall performance.

Fixed voice revenue declined by a sizable 22%, which is indicative of the changing landscape in communication and changes in consumer preferences. The group’s mobile service revenue increased by 54.4%, but this was still insufficient to offset the loss from the fixed-line business as headline earnings per share decreased significantly. 

The difference in the fortunes and prospects of these different business segments is part of the reason Telkom experienced a costly R1.186 billion hit as the group offered voluntary early retirement and severance packages to more than 2000 employees. Three-quarters of employees who got the offer took the deal, which is part of Telkom’s strategy to reshape its workforce into one with the skills to meet the needs of the future.

On a brighter note, the group increased its customer base to 12 million, boosted its fibre to the home (FTTH) connectivity rate, and improved its free cash flow to R2 billion.


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