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Hikma Pharmaceutical (HIK)

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Friday 19 August, 2011

Hikma Pharmaceutical

Trading Statement

RNS Number : 7130M
Hikma Pharmaceuticals Plc
19 August 2011




Trading update                                                                     


London, 19 August, 2011:  Hikma Pharmaceuticals PLC (LSE: HIK) (NASDAQ Dubai: HIK) ("Hikma"), the global pharmaceutical group, is today providing the following update on trading.

Since the beginning of the year, the overall performance of the Group has been good and the Group remains on track to deliver around 7% organic revenue growth for the full year, with a gross margin of around 47%. 

In the Branded business, our team in the MENA region has done an excellent job managing unprecedented disruptions in certain markets and has strengthened our sales and manufacturing operations.  We are on track to deliver our forecast for the first half, in line with market expectations, driven by a recovery in Egypt and Tunisia and double-digit growth in most other markets.  While sales activities in Libya and Yemen remain limited and in certain markets ACTOS® sales have been suspended or negatively impacted by more restrictive labeling, we continue to expect the Branded business to deliver around 7% revenue growth for the full year, with operating margins of around 23%.

In the US, our team has gone a long way towards off-setting lost sales from the discontinuation of colchicine and we continue to expect Generics revenues of around $160 million for the full year.  Given investments we have made to strengthen the senior management team, we expect operating margin for the full year to be in the low-teens.

Our legacy Injectables business is having an excellent year and is delivering on our strategy of building scale through strong organic growth.  We expect this strong performance to continue in the second half and expect significant operating margin expansion for the full year.  

Due to the significant delay in the closing the MSI transaction, caused by an extended FTC review, we incurred higher than expected integration and transaction costs of $5.4 million, which have resulted in a net loss from MSI of around $5.0 million for the two months to 30 June, taking into consideration financing costs. Since closing on 2 May 2011, the integration process has proceeded apace.  We have identified opportunities for cost savings, operational synergies and portfolio optimization and are well advanced in the implementation of our restructuring plans.  We expect the MSI business will break even for the second half of the year.  For 2012, we expect MSI to contribute revenues of at least $180 million and EBITDA margin of at least 10%.

Negative movements in the Sudanese Pound, the Egyptian Pound, the Japanese Yen and the Euro relative to the dollar are also having a material impact on our results.  We now expect reported net income for the Group to be in the range of $85 million to $90 million for the full year, including one-time transaction and integration costs and assuming current exchange rates.  In constant currency, however, we expect Group net income to be in the range of $95 million to $100 million, including one-time transaction and integration costs.

We will announce our interim results for the six months to 30 June on 25 August 2011.

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Hikma Pharmaceuticals PLC

Susan Ringdal, Investor Relations Director                          +44 (0)20 7399 2760/07776 477 050


Financial Dynamics                                                                         +44 (0)20 7831 3113

Ben Atwell /Julia Phillips/Jonathan Birt/Matthew Cole


About Hikma

Hikma Pharmaceuticals PLC is a fast growing multinational pharmaceutical group focused on developing, manufacturing and marketing a broad range of both branded and non-branded generic and in-licensed products.  Hikma's operations are conducted through three businesses: "Branded", "Injectables" and "Generics" based principally in the Middle East and North Africa ("MENA") region, where it is a market leader, the United States and Europe.  In 2010, Hikma achieved revenues of $731 million and profit attributable to shareholders of $99 million. 



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