| Key points from the statement: – Stable medical scheme administration: This segment, which contributed 54% to FY 23A operating profits, has remained steady with growth in various public and private schemes. – Pharmaceutical Cluster challenges: The impairments are driven by several factors: Adverse price adjustments in key product lines have hurt profitability, with expectations of continued pressure in the medium term. The anticipated benefits from new pharmaceutical product lines are not materializing as initially expected. Impairments breakdown: – Activo: Contributing 11% to FY 23A operating profits, ACT recognized a R130 million impairment on goodwill from the acquisitions of Activo and Forrester Pharma in 2019 and 2021, respectively. – Pharmacy Direct: Accounting for 9% of FY 23A operating profits, Pharmacy Direct is facing profitability challenges due to lower margins in the private sector and the new chronic medication delivery contract with the Department of Health. A R100 million goodwill impairment has been recorded here. FY 24e presentation next week: AfroCentric will host its annual results presentation on Wednesday, 4 September at 10am. Register here to join! |
