Competition in generics sees Hikma Pharmaceuticals's profits decline by a tenth

Hikma Pharmaceuticals posted lower full-year profits as stiff competition in generics saw its top line growth flatten out.

"While our Generics business has been impacted by industry-wide competitive pressures, we have focused on controlling our costs, driving efficiencies and building our specialty portfolio, which will support the outlook for this business going forward," chief executive officer Said Darwazah said.

For the year ending on 31 December, the maker of non-branded generic and in-licensed pharmaceutical products reported that on an underlying basis its top line shrank by 1% to $2.52bn, amid "severe" competitive pressures in the Generics space and foreign exchange headwinds in the MENA region.

However, a "good" performance in Injectables and Branded helped to offset most of the hit to its top line from those negative factors.

Buoying the former were acquisitions, new launches and an expansion into new regions.

Attributable profit was down by a tenth from 2021 to $406m, while basic earnings per share slipped 7% to 181.3 US cents.

On a statutory basis, while the drugmaker also reported a 1% decline in revenues, profits attributable to its shareholders dropped by 49% and its basic EPS declined 47% to 83.9 US cents.

Leverage at period end was "low" with net debt of 1.5 times core earnings before interest, taxes, depreciation and amortisation.

Looking ahead, Hikma guided towards revenue growth in 2023 of 7-9% from Injectables, together with core operating margins of 36-37%, and branded revenue growth in the mid to high single digits at constant currencies.

Generics meanwhile were seen recording low double-digit revenue growth with core operating margins of 16-18%.

"We are confident that we will deliver good growth across all three of our businesses in 2023 as we continue to expand our product portfolio and enhance our manufacturing and commercial footprint," Darwazah said.

The final dividend was bumped up from 54 US cents to 56 cents.

As of 0913 GMT, shares of Hikma Pharmaceuticals were rising by 5.16% to 1,844.0p.