Shares in Hikma fall after results disappoint
By Abigail Townsend
Date: Wednesday 26 Feb 2025
(Sharecast News) - Shares in Hikma Pharmaceuticals came under pressure in early trading on Wednesday, despite a jump in annual revenues, after core operating profits and a weaker margin disappointed.
The blue chip generics specialist said statutory revenues in the year to December end rose 9% to $3.2bn, while operating profits soared 67% to $612m, boosted by an impairment reversal.
However, while core revenues jumped 10%, underlying operating profits increased by just 2%, or 4% on a constant currency basis, to $719m. The margin also softened, to 22.8% from 24.6% in 2023.
As at 0830 GMT, shares in Hikma were down 8% at 2,122p.
Riad Mishlawi, chief executive, insisted it had been "another strong year" for the business. The firm saw growth in all three of its business segments, with revenues up 10% in injectables, 8% in branded and 11% in generics.
Mishlawi continued: "We continued to invest in the business to support our future progress, with a strategic acquisition alongside new partnerships and agreement.
"This momentum, combined with our diversified portfolio, leading market positions and increasing investment in R&D, underpin our positive outlook for 2025 and confidence for the future."
However, Hikma - which last year struck a $185m deal to buy a package of assets from Denmark's Xellia Pharmaceuticals -forecast slower revenue growth in 2025, with annual revenues expected to rise by between 4% and 6% in the current year.
Group core operating profit was guided to be in the range of $730m and $770m, following a 20% hike in R&D.
Richard Hunter, head of markets at Interactive Investor, said: "Less positive for the wider pharmaceutical sector was an update from Hikma. While revenues and operating profit rose strongly, at the core level operating profit only rose marginally, while margin fell."
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