13th Mar 2019 09:00
LONDON (Alliance News) - Hikma Pharmaceuticals PLC on Wednesday said it swung to a profit from a loss in 2018 due to good demand, new product launches, and a substantial impairment the year before.
The generic drug maker posted a pretax profit of USD293 million for the year, swinging from a pretax loss of USD738 million in 2017.
Operating expenses played a key role in this, falling to USD679 million from USD1.71 billion after the USD1.08 billion impairment of intangible assets and property, plant and equipment from its Columbus drug-making facility. This manufacturing facility has since been restructured, Hikma said.
Revenue was USD2.07 billion, a 6.7% increase from USD1.94 billion in 2017, which Hikma said reflected strong demand for its in-market products and new launches. Company-compiled consensus was for revenue of USD2.10 billion, putting Hikma's actual result just behind.
Core operating profit was USD460 million 19% above its core operating profit of USD386 million in 2017 but 2.3% less than the USD471 million consensus.
Core basic earnings per share was 137.8 US cents, an increase of 31% from 105.0 cents the year before and 2.1% ahead of consensus for 135 cents.
Hikma's core figures exclude exceptional items such as impairments and acquisition costs.
The company declared a final dividend per share of 26 cents, taking the full-year dividend to 38 cents for the year. This is 12% higher than its dividend of 34 cents per share for 2017.
In terms of segmental performance, Hikma's 2018 guidance was for revenue in the range of USD825 million to USD850 for Injectables. This was achieved, with Hikma's revenue for the segment at USD826 million. It was 6% ahead of its 2017 Injectables revenue of USD776 million.
Looking ahead, Hikma expects revenue from its Injectables segment to be in the USD850 million to USD900 million range in 2019. The core operating margin is likely to be between 35% and 38% compared to 40.3% in 2018 and 40.6% in 2017.
Generics revenue is expected to be between USD650 million and USD700 million in 2019, compared to USD692 million in 2018 and USD615 million in 2017. Hikma's 2018 guidance was for Generics revenue to be between USDUSD675 million and USD700 million, which it achieved.
Branded revenue is expected to grow in the mid-single digits at constant currency in 2019, having increased 5% at constant currency in 2018. Branded revenue was USD542 million in 2018, up from USD536 million in 2017, an increase of 1%, or 5% at constant currency.
Hikma's chief executive and its chair were optimistic about the company's future, with CEO Siggi Olafsson expressing confidence that the company can build on its momentum.
Executive Chair Said Darwazahb said: "Looking ahead to 2019 and beyond, I am very optimistic for the future of Hikma. I believe we have set ourselves the right strategic objectives and have a strong leadership team in place to deliver sustainable growth over the long term."
Shares in Hikma were down 2.3% at 1,617.39 pence on Wednesday morning.
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