Hikma shares spike after pharma giant’s profit up 30 per cent

Pharmaceuticals giant Hikma’s share price spiked on Thursday after reporting a 30 per cent increase in profit, but it expects them to be slightly lower in 2024 than last year.

The drugmaker reported stronger-than-expected operating profits for last year with $367m (£289m), as revenue hit $2.875bn (£2.26bn), an increase of 14 per cent on last year.

Following the open, Hikma’s shares rose by more than five per cent on the FTSE 100.

It said operating profit in its core business was up by 19 per cent at a margin of almost 25 per cent, driven by better profitability in its branded and generic businesses. Generics experienced particularly strong growth, with revenue up 39 per cent and core operating profit up 86 per cent.

It said reported operating profit increased by 30 per cent which reflected higher 2022 impairment charges, but after including the 2023 impact of a $129m (£101m) provision to cover an expected settlement for opioid-related cases in North America

It said the full-year dividend of 72 cents per share was up from 56 cents per share last year, and its board “intends to progressively increase Hikma’s dividend” which reflects “confidence in the long-term growth prospects”.

Riad Mishlawi, chief executive of Hikma, said Hikma “delivered strong growth and made significant progress in 2023.”

“All three of our businesses grew, delivering double-digit group revenue and operating profit growth with an impressive core EBITDA margin of 28 per cent.

“Our results demonstrate momentum across each of our three businesses, with new product launches and partnerships continuing to expand our portfolio, including into more complex areas such as oncology.”

Mishlawi said the firm “has a resilient portfolio of diversified global businesses that are expanding to meet growing regional needs for a broad range of essential medicines.”

Hikma replaced its CEO last year with Mishlawi taking over in September. Investors dropped the pharma giant, with its latest results set to shore up some confidence that it’s getting back on its feet.

In the last 12 months, its shares have received a boost under the new CEO, up more than 18 per cent.

It said core operating profit jumped 19 per cent to $707m, higher than expectation of about $689 million, but expects a profit of $660m-$700m this year, which is slightly lower than market expectations of about $680m.