Generics and injectables drive first half growth at Hikma Pharmaceuticals

The FTSE 250 company said its operating profit for the period was $174m, up 54%, while core group operating profit rose 22% to $214m, or 23% in constant currency.

Core basic earnings per share totalled 61.4 US cents, up 35%, and 38% in constant currency, with basic earnings per share rising 53% to 44.0 cents, or 57% in constant currency.

Cash flow from operations reached $185m.

Hikma said its net debt fell to $501m, from $546m at the end of December, with “healthy” leverage ratios maintained.

Its board declared an interim dividend of 12 cents per share, up from 11 cents per share a year ago.

The company also raised its guidance for the injectables and generics businesses, and reiterated it for the branded business.

“I am pleased with our first half performance, with each of our three business segments achieving revenue and, importantly, profit growth,” said Hikma chief executive officer Siggi Olafsson.

“Our injectables business continues to demonstrate resilience.

“Our broad portfolio, extensive manufacturing capabilities and geographic footprint are enabling us to respond quickly to changing market dynamics and grow our market share.”

Olafsson said that in the generics business, Hikma was “successfully” driving demand for its “more differentiated” in-market products, and was making progress reducing its cost base.

“We achieved good results in the branded business, taking into consideration the usual seasonality.

“In the first half, we renewed our focus on advancing our pipeline, enhancing our corporate research and development team and accelerating new projects.

“More broadly, we are strengthening key functions across the group and bringing new capabilities to ensure we have the right teams in place to take the business forward.”

Hikma’s performance in the first half exceeded the board’s expectations, Olafsson said, and it was reportedly “pleased” to be able to raise its guidance for both the injectables and generics businesses for the full year.

“The measures we have taken and investments we have made across the group over the past year are delivering results, but we still have work to do.

“Our markets are competitive and we don't expect the same demand for some of our injectable products to continue into 2019,” Siggi Olafsson explained.

“This means we must remain focused on strengthening our customer relationships, improving profitability and advancing our pipeline to ensure future growth.”