10th Nov 2016 07:43
LONDON (Alliance News) - Hikma Pharmaceuticals PLC on Thursday trimmed its revenue expectations for 2016, now expecting to see a rise of 35% in constant currency to about USD2.00 billion for the full year.
This is reduced from Hikma's previous guidance in August of between USD2.00 billion and USD2.10 billion, as a result of tempered revenue expectations for its Generics business.
The drug maker noted that its Injectibles business has been performing well in 2016 to date, and it remains on track to deliver revenue growth in the mid to high-single digits in 2016. Due to a favourable product mix, Hikma now expects its core operating margin in this business to be around 39%, increased from its previous guidance of 38%.
But its Generics business has fared less well, as Hikma said that since August it has been "more challenging than initially expected" to drive volume growth in certain products. It expects this to continue throughout the remainder of 2016, and now expects the Generics division to produce revenue of around USD600 million for the full year.
Hikma reiterated its expectations for a full-year core operating profit in the range of USD30 million to USD40 million in Generics, however, due to cost savings and the optimisation of research and development expenses.
Hikma said it expects its enlarged Generics business to deliver revenue of USD800 million in 2017, as it focuses on improving its sales mix.
Meanwhile, the Branded division has seen a steady improvement in revenue during the second half of 2016 at constant currency, Hikma said. However, overall growth has been slightly lower than Hikma's expectations, and its full-year results will be hit at actual exchange rates due to the recent devaluation of the Egyptian pound.
Hikma expects revenue growth in this segment to be in the mid-single digits on a constant currency basis.
"Across the group, we are improving the quality of sales and focusing on profitability. Our global Injectables business is delivering good growth and extremely strong margins. In MENA, our focus on strategic products and greater operating efficiencies is helping to absorb strong currency headwinds. In Generics, the integration of the West-Ward Columbus acquisition is progressing well and we are rapidly implementing cost savings. Although revenue from West-Ward Columbus is ramping up more slowly than originally anticipated, we remain highly confident in the future prospects of the business," said Chairman and Chief Executive Officer Said Darwazah in a statement.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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