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12 Nov 2009 07:00
RNS Number : 3793C
Hikma Pharmaceuticals Plc
12 November 2009
Interim Management Statement
London, 12 November 2009 - Hikma Pharmaceuticals PLC ("Hikma")(LSE: HIK)(NASDAQ Dubai: HIK), the fast growing multinational pharmaceutical group focused on developing, manufacturing and marketing a broad range of generic and in-licensed pharmaceutical products, is today updating the market on its current trading and financial position relating to the period from 1 July 2009 to date as required by the UK Listing Authority's Disclosure and Transparency Rules.
We continue to benefit from our diversified business model, which is enabling us to deliver strong results and to execute on the Group's strategic objectives for growth. We are seeing an acceleration of sales in the fourth quarter, following slower sales in the MENA region in the third quarter, and expect to deliver full year sales growth of approximately 10%, or 13% in constant currency. Group gross margin continues to improve and we are confident that we will deliver full year gross margin of around 46%, up from 44% in 2008.
Branded
According to IMS, Hikma's private retail sales in the nine largest MENA markets grew by 12.3% in the year through September, outperforming the underlying MENA markets which grew by 6.8%. This slowdown in market growth reflects the usual slower summer period in the MENA region, the additional impact of Ramadan and Eid, which this year fell in September, and market declines in Algeria and Morocco related to currency fluctuations and government imposed limitations on imports and sales in Algeria.
Hikma's overall Branded sales were slower during the third quarter, largely due to the market factors described above. Sales are accelerating in the fourth quarter and we expect to deliver Branded sales growth of 10% for the full year.
Since July we have signed a number of licensing agreements, in line with our strategy of increasing the proportion of our sales of patented products in MENA. In July we signed two agreements with Faes Farma SA, which cover the entire MENA region. During the period, we also signed a new distribution and promotion agreement with Astellas for Advagraf, a modified-release, once-daily formulation of Prograf, Astellas' leading immunosuppressant tacrolimus. The completion of these and other agreements reflects the increasing recognition by leading pharmaceutical companies that Hikma is the partner of choice for marketing branded products in the region. We can expect to see the impact of these new long-term licensing agreements over the short- and medium-term.
Injectables
We expect full year Injectables sales to be broadly in line with last year. In July, we began to supply our products to one of the leading US group purchasing organisations, and in Europe strong demand for our products in Germany, Portugal and Italy during the period has driven good sales growth. In the MENA region, we continue to expect a pick up in sales as tender business comes through in the fourth quarter. We are pleased to report that our injectables manufacturing facility in Portugal recently completed a very successful inspection by the United States Food and Drug Administration.
Generics
The improvement in performance achieved in the Generics business in the first half has continued into the second half. Strong demand for both our US manufactured products and our anti-infectives manufactured at our FDA approved plants in Jordan and Saudi Arabia is driving significantly better than expected sales growth and margins in this business.
Through our continuing focus on working capital management and on driving quality sales, we have delivered a further notable improvement in cash flow from operations across all regions since the end of June. This has resulted in an improvement in our net debt position to $155.7 million at the end of September 2009, compared to $164.4 million at the end of June 2009 and $170.9 million at the end of December 2008. We now expect a slightly higher effective tax rate reflecting the strong performance in our US Generics business.
We will announce our preliminary results for the twelve months to 31 December 2009 on 17 March 2010.
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Enquiries:
Hikma Pharmaceuticals PLC
Said Darwazah, Chief Executive Officer
Bassam Kanaan, Chief Financial Officer
Susan Ringdal, Investor Relations Director Tel: +44 (0)20 7399 2760
Brunswick GroupJon Coles / Justine McIlroy Tel: +44 (0)20 7404 5959
Hikma Pharmaceuticals PLC is a fast growing multinational 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 2008, Hikma achieved revenues of $581 million and profit attributable to shareholders of $57 million. For news and other information, please visit www.hikma.com.
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