Revenue growth at Hikma to slow down after strong year

Pharmaceuticals group Hikma registered an impressive increase in revenue in 2012, helped by strong performances from both the Branded and Injectables divisions, but warned that sales growth would slow this year.

Pharmaceuticals group Hikma registered an impressive increase in revenue in 2012, helped by strong performances from both the Branded and Injectables divisions, but warned that sales growth would slow this year.

After the 20.8% growth seen in 2012, the company said that the rate would reduce to around 10% in 2013.

In 2012, group revenue increased from $918m to $1,108.7m in the 12 months to December 31st, bang in line with estimates, helped by a strong performance in its Middle East and North Africa (MENA) region, which accounts for 55.8% of group sales.

Chief Executive Officer Said Darwazah said the region is "thriving" due to the investment Hikma has made to strengthen its manufacturing and sales operations.

The generic Injectables business which accounts for 42.4% of revenue (34.4% in 2011), delivered impressive revenue growth of 48.9% last year, with the US market (63% of the division) performing strongly.

Meanwhile, the Branded division, which develops and markets branded generics and a portfolio of in-licensed products, saw revenues increase by 19.7%. This accounts for 55.8% of the whole Hikma business.

Profit before tax in 2012 jumped 40.6% from £93.9m to £132m, but growth was held back by a $20.9m operating loss in the Generics division (revenues down 33% in this unit) due to remediation work at the Eatontown facility. Compliance work was undertaken after a warning letter from US regulators in February 2012, leading to production stopping in the final two months of last year.

The full-year dividend was raised 23.1% from 13 cents per share to 16 cents per share.

"I am pleased with the very strong performance of the group this year," Said commented.

"Our focus in 2013 continues to be on building our business in MENA and on strengthening our global Injectables business. We are well positioned for 2013 and we look forward to another strong year."

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