Pharmaceutical company Hikma (HIK) beats expectations in the six months to 30 June, prompting an upgrade in guidance for both its injectables and generics businesses.

Shares in Hikma have rallied 8.6% to £17.89 on the news.

The strong performance marks an impressive turnaround since last year when sales guidance was cut three times.


Full year sales for injectables are expected to hit $775m to $825m, up from a range of $750m to $800m.

Hikma says core operating margin in the division is expected to rise from low to mid 30s to mid to high 30s in percentage terms.

The company has benefitted from strong demand for its products and product launches, offsetting declining sales from top products due to intense competition.

There was also good news on the generics business with annual sales forecast to reach $600m to $650m instead of between $550m and $600m.

The core operating margin in generics is also expected to rise from low single digits to mid to high single digits.

Operating profit has soared 54% to $174m while sales have jumped 10% to $989m when currency fluctuations are stripped out.

Cantor Fitzgerald analyst Brian White forecasts a return to double digit operating margins by 2020.


Numis analyst Paul Cuddon is impressed with the strong half year results, suggesting a 15% upgrade in earnings per share in 2018 could be in the cards, as well as a 2% rise in 2019.

Cuddon maintains his recently downgraded recommendation ‘hold,’ arguing the guidance upgrade has already been priced in as the shares have more than doubled in value since March.

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Issue Date: 15 Aug 2018