AFT’s Operating Profit Dips as It Invests Heavily in Global Growth and R&D

Solid Growth in Core Markets

AFT Pharmaceuticals has delivered another year of steady revenue growth, reaching NZ$208 million for the fiscal year ending March 2025. This 6% increase over FY24 was largely driven by a 17% surge in Australian sales and a 10% rise in New Zealand revenues, reflecting strong market traction across key therapeutic categories such as eyecare, pain relief, and injectables.

Despite this top-line growth, operating profit declined to NZ$17.6 million from NZ$24.2 million the previous year. The dip was primarily due to a significant drop in license income, from NZ$8.5 million to just NZ$0.7 million, alongside disruptions in the first half of FY25 and increased strategic investments in marketing and R&D.

Expanding Global Reach and Product Pipeline

AFT’s international ambitions are clear, with products now sold in nearly 80 countries and active partnerships in over 100. The company is investing heavily in new business hubs across North America, Europe, and Africa, including launches of proprietary products like Combogesic and Crystaderm. These efforts are complemented by a robust R&D pipeline featuring eight patented products and over two dozen off-patent injectables targeting significant global markets.

While international revenues from product sales and royalties dipped to NZ$15.4 million due to temporary customer destocking and market disruptions, second-half FY25 saw an 86% rebound, signaling recovery and momentum. The company’s strategic acquisitions and licensing deals, such as purchasing product licenses from a bankrupt German firm and securing a South African hospital license, position AFT well for sustained global expansion.

Financial Health and Shareholder Returns

Financially, AFT remains well-positioned to fund its growth trajectory. Net debt decreased to NZ$14.5 million, down from NZ$16.2 million at the end of FY24, while shareholder equity has steadily increased since FY19. The board declared a dividend increase to 1.8 cents per share, reflecting confidence in the company’s outlook and cash flow stability.

Looking ahead, AFT forecasts FY26 operating profits between NZ$20 million and NZ$24 million, with a clear target of reaching NZ$300 million in revenue by FY27. This growth will be underpinned by continued product launches, geographic expansion, and the commercialisation of its innovative R&D pipeline.

Balancing Growth with Strategic Investment

The company’s strategy balances near-term commercial gains with longer-term innovation. Investments in marketing, new product development, and international infrastructure have increased operating expenses by NZ$10 million year-on-year. However, these are viewed as necessary to build a scalable global platform and capture unmet medical needs across multiple therapeutic areas.

As AFT Pharmaceuticals moves into its next phase, the interplay between sustaining profitability and funding ambitious growth will be critical. The company’s ability to convert its R&D pipeline into commercial successes and navigate international market complexities will shape its trajectory in the coming years.