Multinational pharmaceutical company Hikma Pharmaceutical (HIK) reported a strong first half with core revenues up 7% to $1.22 billion and core operating profit 15% higher at $309 million.
However, the shares dropped 3.2% to £25.58 as investors focused on the injectables division’s modest growth in comparison to the exceptionally strong first half of 2020 when the division benefited from Covid-related stocking from hospitals.
Another factor influencing the latest share price reaction, argues pharma analyst Paul Cuddon at Numis, is that after a good run the shares ‘now trade on 13 time FY21 EV/EBITDA, toward the top end of the recent 5-year range’.
GENERICS UPGRADED
The generics division saw strong growth with revenues up 8% to $400 million driven by four new product launches from the research and development pipeline.
Reflecting strong first half performance to 30 June, the company has increased full year guidance for generic revenues to be between $810 million to $830 million up from $770 million to $810 million, and for the core operating margin to be in the range of 22% to 24%, up from 20%.
The branded products division achieved a very strong first half with revenues growing 17% to $319 million driven by growth in the core markets of Algeria, Saudi Arabia and Egypt.
An improved product mix saw better margins with the core operating margin hitting 20.1% up from 18.5% last year.
The group ended the period with net debt of $606 million representing 0.9 times core EBITDA (earnings before interest, tax, depreciation, and amortisation).
Chief executive Siggi Olafsson said: ‘We are continuing to benefit from investments we have made to build our pipeline of new medicines and our progress in the first half underpins our improved outlook for the full year.’
