Jordan's Hikma Pharmaceuticals first-half sales rise 10 per cent

Reuters, Thursday 25 Aug 2011

The company, which generates 60 per cent of its sales from countries across the MENA region, shows resilience in the face of political unrest

Strong sales in Algeria, Sudan and Iraq helped Jordan's Hikma Pharmaceuticals lift first-half revenue 10.4 per cent, despite problems in other North African and Middle East markets.

Hikma, which sells both generic and branded drugs, has been at the eye of the storm as unrest has spread across North Africa and the Middle East, since it generates around 60 per cent of its sales from the region.

Operations in Tunisia, Egypt, Libya, Yemen and Bahrain were all impacted by political unrest, although most of these markets are now recovering well, it said on Thursday. In Libya, however, Hikma is only now beginning to see signs of a recovery.

The Amman-based company reported sales in the first six months of 2011 of US$394.8 million, broadly in line with forecasts. Earnings were down, as expected.

Operating profit of $49 million was 34 per cent less than a year ago, reflecting lower margins due to loss of some high-profit lines. That was equivalent to adjusted diluted earnings per share of 20.7 cents, down 23 per cent.

Analysts had expected Hikma to report revenue of $396.5 million and EPS of 22 cents, according to Thomson Reuters I/B/E/S.

In a trading statement issued last week, the group had already reiterated its previous guidance for organic revenue growth of 7 per cent and a gross margin of 47 per cent this year, despite the political upheaval.

The expected growth rate for 2011 is around half last year's level.

Hikma sells branded drugs across 17 markets in the Middle East and North Africa, led by Saudi Arabia and Algeria. Libya accounts for only around 2 per cent of sales.

In addition to the political turmoil in North Africa and the Middle East, Hikma has suffered separately from suspension or restriction on use of diabetes pill Actos in some markets.

The group, which also sells generic drugs in the United States, completed the $112 million acquisition of Baxter's injectables business in May.

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