Struggling health and wellness firm Ascendis Health on Wednesday said it expects its earnings before interest, taxes, depreciation and amortisation (Ebitda) for the six months to December 31, to be between R4-billion and R4.2-billion.

This will mark an increase of between 0% and 5% when compared to the Ebitda of just over R4-billion reported for the same period in 2018.

Its operations in South Africa will account for between R1.8-billion and R1.9-billion of the Ebitda, while its international operations will account for between R2.1-billion and R2.2-billion.

This growth in international revenue and normalised Ebitda is driven primarily by higher sales in Europe owing to new tender business secured by Cyprus-based Remedica and new product launches by Sun Wave Pharma, the company said.

This was partially offset by increased market competition in Scitec’s core Farmalider.

Revenue at Remedica is expected to grow by between 15% and 27% to between €16.1-million and €17.8-million for the six months.

Revenue growth in South Africa, specifically, is owing to the recovery from the prior year’s supply issues in Pharma, new agency contracts in Medical Devices and new tender awards in Animal Health.

Overall, the growth in normalised Ebitda was driven by higher gross profit as a result of the increased revenue, partly negated by increased provisions for legal fees in Farmalider relating to a dispute with a supplier and increased investment in marketing across Europe and South Africa.

The group incurred extensive legal and adviser fees associated with the restructuring of the senior lender debt, and other one-off costs related to the disposal of Biosciences and the Remedica negotiations, as well as a considerable increase in finance expenses associated with the interim stability agreements with the senior lenders, Ascendis explained in a statement.

An impairment loss for goodwill and intangible assets of R24-million was also recognised and accounted for in respect of the Direct Selling business owing to the deterioration in the trading performance.

The financial results for the six months to December 31 are expected to be released on or about March 11.