REG - Hikma Pharmaceutical - Half-year Report
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RNS Number : 3136U Hikma Pharmaceuticals Plc 07 August 2025
Hikma delivers a solid H1 performance and re-affirms expectations for strong
growth in the second half
London, 7 August 2025 - Hikma Pharmaceuticals PLC and its subsidiaries
('Hikma' or 'Group'), the multinational pharmaceutical company, today reports
its Interim Results for the six months ended 30 June 2025.
Riad Mishlawi, Chief Executive Officer of Hikma, said:
"In the first half of 2025, the strategic changes and renewed focus we put in
place have started to deliver tangible results. We achieved strong revenue
growth and built solid momentum across the business. While core operating
profit was lower due to a strong comparator in 2024 and a change in product
mix, we expect a return to growth in the second half and are pleased to
reiterate our full-year 2025 guidance for the Group.
Demand across our portfolio remains robust, we are successfully launching new
products, strengthening our manufacturing capabilities, and securing key
strategic partnerships. We are also making significant strides in advancing
our pipeline and increasing our investment in R&D. With this foundation,
we are well-positioned for the future and I look forward to sharing more
updates on our continued growth."
Group H1 highlights:
Reported results H1 2025(1) H1 2024 Change Constant currency
$ million change
Revenue 1,658 1,569 6% 5%
Operating profit 259 351 (26)% (25)%
Profit attributable to shareholders 238 226 5% 6%
Cashflow from operating activities 161 198 (19)% -
Basic earnings per share (cents) 108 102 6% 7%
Interim dividend per share (cents) 36 32 12% -
Core results(3) H1 2025 H1 2024 Change Constant currency
$ million change
Core revenue 1,657 1,569 6% 5%
Core operating profit 373 402 (7)% (6)%
Core EBITDA(4) 429 453 (5)% (5)%
Core profit attributable to shareholders 270 283 (5)% (4)%
Core basic earnings per share (cents) 122 128 (5)% (3)%
H1 FINANCIAL HIGHLIGHTS
· Group revenue up 6% driven by robust volumes across all segments and
geographies
o Injectables revenue up 12% driven by good performances in Europe (up 26%),
MENA (up 16%) and North America (up 8%), supported by recent launches and the
Xellia portfolio
o Branded revenue up 4% as we continue to increase market share across MENA
o Hikma Rx(5) revenue down 1%, as expected, with differentiated portfolio
performing well
· Group core operating profit down 7% but continue to expect strong growth
in H2
o Injectables core operating profit down 7% (down 4% in constant currency)
and core operating margin of 30.0%, reflecting evolving product mix and
appreciation of the Euro
o Hikma Rx core operating profit down 12% vs strong H1 2024, with 17.6% core
operating margin
o Branded core operating profit up 3% (up 1% in constant currency), with
core operating margin of 30.4%, reflecting the usual weighting of costs to the
second half of the year
o Reported Group operating profit of $259 million, down 26%, impacted by the
non-core legal settlement related to sodium oxybate
· Robust balance sheet, cashflow and dividend growth
o Cashflow from operating activities of $161 million (H1 2024: $198 million)
o Net debt(6) to core EBITDA(7) of 1.7x at 30 June 2025 (31 December 2024:
1.4x)
o Interim dividend of 36 cents per share, up 12%
STRATEGIC PROGRESS
· Increasing investment to support growth
o 20% increase in R&D investment vs H1 2024, as we invest to accelerate
pipeline growth
· Successful integration of Xellia to strengthen Injectables and Hikma Rx
o Zagreb R&D centre, with over 80 employees now contributing to both
Injectables and Hikma Rx
o Upgrade of Bedford, Ohio Injectables facility on track
· Broadening and enhancing portfolio through approvals and launches
o Received US FDA approval for TYZAVAN(TM), a novel ready-to-use formulation
of vancomycin injection, and ustekinumab, a biosimilar referencing Stelara(®)
o Expanded oral oncology portfolio in MENA with the launch of palbociclib
(Papillio) and improved market share for key therapies in diabetes, multiple
sclerosis and respiratory
o Launched the first generic of mercaptopurine oral suspension in the US,
with FDA Competitive Generic Therapy designation
· Strengthening the pipeline through strategic partnerships and agreements
o Signed seven partnerships across all three businesses, including an
exclusive licensing agreement with pharmaand GmbH (pharma&) to
commercialise rucaparib, an innovative oral oncology therapy, across MENA
o Acquired the FDA-approved Abbreviated New Drug Application (ANDA) for
trametinib tablets from Novugen
MAINTAINING STRONG 2025 GROUP OUTLOOK
· 2025 Group revenue growth of 4% to 6%
· 2025 Group core operating profit of $730 million to $770 million
INTERNATIONAL TRADE POLICIES AND US DOMESTIC MANUFACTURING
· The US administration's trade strategy involving the introduction of
tariffs on direct US imports is being closely monitored. The situation remains
dynamic and Hikma continues to assess the situation and take mitigating
actions where appropriate
· The full year 2025 outlook for the Group takes into account an impact
from tariffs as implemented at the date of this release, and related
inflationary pressures
· During the first half, Hikma announced it will invest $1 billion by
2030 to further expand its US manufacturing and R&D capabilities
· Hikma has a long history of consistently expanding its US
manufacturing capabilities and volume capacity, and is uniquely positioned as
a large domestic manufacturer of generic medicines needed by the US healthcare
system to treat patients nationwide
Further information:
A pre-recorded presentation will be available at www.hikma.com
(http://www.hikma.com) at 07:00 BST. Hikma will also hold a live Q&A
conference call at 09:00am BST, and a recording will be made available on the
Company's website.
To join via conference call please dial:
United Kingdom (toll free): +44 808 189 0158
United Kingdom (local): +44 20 3936 2999
Access code: 358168
For further information please contact Deepa Jadeja - djadeja@hikma.com
(mailto:djadeja@hikma.com) .
Hikma (Investors):
Susan Ringdal +44 (0)20 7399 2760/ +44 (0)7776 477050
EVP, Strategic Planning and Global Affairs
Guy Featherstone +44 (0)20 3892 4389/ +44 (0)7795 896738
Director, Investor Relations
Layan Kalisse +44 (0)20 7399 2788/ +44 (0)7970 709912
Senior Associate, Investor Relations
FTI (Press):
Ciara
Martin
+44 (0)7779 775979
About Hikma:
Hikma helps put better health within reach every day for millions of people
around the world. For more than 45 years, we've been creating high-quality
medicines and making them accessible to the people who need them.
Headquartered in the UK, we are a global company with a local presence across
North America, the Middle East and North Africa (MENA) and Europe, and we use
our unique insight and expertise to transform cutting-edge science into
innovative solutions that transform people's lives. We're committed to our
customers, and the people they care for, and by thinking creatively and acting
practically, we provide them with a broad range of branded and non-branded
generic medicines. Together, our 9,500 colleagues are helping to shape a
healthier world that enriches all our communities. We are a leading licensing
partner, and through our venture capital arm, are helping bring innovative
health technologies to people around the world. For more information, please
visit: www.hikma.com
(https://nam04.safelinks.protection.outlook.com/?url=https%3A%2F%2Fc212.net%2Fc%2Flink%2F%3Ft%3D0%26l%3Den%26o%3D2531421-1%26h%3D3823969217%26u%3Dhttp%253A%252F%252Fwww.hikma.com%252F%26a%3Dwww.hikma.com&data=02%7C01%7Csweiss%40Hikma.com%7C4a35048c8c764c63c86308d70efbac9e%7C178c1a723d3c40afbaa754615303bcdc%7C0%7C1%7C636994346427346162&sdata=lHZaoOb0u30Y6re6yfLW1Ar4vvBS%2FnjEUNdB00TBaTI%3D&reserved=0)
Hikma Pharmaceuticals PLC (LSE: HIK) (NASDAQ Dubai: HIK) (OTC: HKMPY)
(LEI:549300BNS685UXH4JI75) (rated BBB/stable S&P and BBB/stable Fitch)
STRATEGIC REVIEW
We continued to implement our strategic priorities in the first half of 2025,
making strong progress expanding our portfolio, strengthening our pipeline,
enhancing our manufacturing capabilities and signing new partnerships.
In the US we maintained our position as a top-three provider of generic
sterile injectables by volume(8) and a key supplier of non-injectable generic
medicines. In the MENA region, we remain the second largest pharmaceutical
company by sales(9), with a growing portfolio and reach. In Europe, we are the
sixth largest supplier of injectables by sales(10) thanks to our expansion in
France, Spain and the UK.
Injectables
Our Injectables business, which manufactures and supplies generic injectable
medicines to hospitals across North America, Europe and MENA delivered good
revenue growth in the first half with profit impacted by a change in product
mix and the strong appreciation of the Euro.
In North America, where we launched 11 products, we benefitted from
liraglutide, the first approved ANDA for a generic GLP-1 referencing
Victoza(®), as well as the Xellia portfolio acquired in September 2024(11).
Their respective contribution to sales helped to offset competition on some of
our larger products. We are making excellent progress with our R&D
projects, which will support the long-term growth of the Injectables business.
During the first half, we received FDA approval for the biosimilar
ustekinumab, and for our reformulated vancomycin ready-to-use bag,
TYZAVAN(TM), which we will launch in the second half. Our Canadian business
continues to grow as we actively address product shortages, reinforcing
Hikma's position as a trusted and reliable supplier of essential medicines.
Our MENA business had a strong first half, building market share across the
portfolio. We had a good performance from our oncology, biotechnology and
anti-infective portfolios as well as new launches, including our first
diagnostic product from our partnership with Guardant Health.
In Europe, we performed well across our established and recently entered
markets. For example in France, which we entered in 2022, we more than doubled
revenue in the first half. We are expanding our European portfolio through new
launches, with 19 in the first half, and we are also benefiting from our local
European manufacturing capabilities. We expect contract manufacturing
revenues, which are largely generated in Europe, to be second half weighted.
Branded
Our Branded business, which supplies branded generics and in-licensed patented
products across the MENA region, continued to grow market share across the
region. Chronic therapy areas remain a key driver of our expansion, with
treatments for diabetes, respiratory illness and multiple sclerosis all
contributing to growth in the first half. We also remain a leader in oral
oncology in the region, with a particularly good contribution from recently
launched products, including the targeted breast cancer therapy, palbociclib,
sold under our brand name Papillio, a first generic of this important medicine
in Algeria.
We have a significant and expanding manufacturing presence in the region,
where localisation is key to our strategy, and during the first half of 2025
we have continued to make operational enhancements, including facility
expansions, automation and rolling out inspection-readiness programmes, which
will collectively improve efficiencies and enhance our quality levels.
Hikma Rx
Hikma Rx, which supplies oral and other non‑injectable generic and specialty
products to the US retail market, delivered a good first half performance
against a heavily H1-weighted 2024 result.
Our differentiated portfolio is performing well with strong volume growth,
especially for our inhalation products, which is partially offsetting expected
levels of price erosion. We have also maintained our strong position in the
sodium oxybate market.
We continue to focus on efficiencies in this business, improving output and
managing our cost base. Concurrently, we have increased our R&D spend,
as previously communicated, as we work to ensure we build out our pipeline to
drive future performance.
We continue to leverage our state-of-the-art production facility in Columbus,
Ohio for contract manufacturing for a range of customers, and preparations at
the site are ongoing for our previously announced contract with a large global
pharmaceutical company.
Outlook for full year 2025
We continue to expect Group revenue to grow in the range of 4% to 6%, and for
core operating profit to be in the range of $730 million to $770 million.
We continue to expect Injectables revenue to grow in the range of 7% to 9%.
We now expect core operating margin to be in the range of 32% to 33%
(previously mid-30s), primarily reflecting the strong appreciation of the
Euro, as well as some inflationary pressure on shipping and other expenses.
We now expect Branded revenue to grow in the range of 6% to 7% on both a
constant currency and reported basis and for core operating margin to be close
to 25%, reflecting a favourable product mix and strong performance from new
launches.
We continue to expect Hikma Rx revenue to be broadly flat vs 2024, and core
operating margin to be around 16%.
We expect Group core net finance expense to be in the range of $90 million to
$95 million and the core effective tax rate to be around 22%.
We expect Group capital expenditure to be in the range of $170 million to $190
million.
Medium term guidance
We held an investor event at our Columbus, Ohio plant in May, showcasing both
our Hikma Rx and Injectables businesses, and at the same time we introduced
medium term guidance:
· Group revenue CAGR of 6% to 8% between 2024-2027
· Group core EBIT CAGR of 7% to 9% between 2024-2027
· Group revenue of $5 billion by 2030
FINANCIAL REVIEW
The financial review set out below summarises the performance of the Group and
our three main business segments: Injectables, Branded and Hikma Rx, for the
six months ended 30 June 2025.
Group
$ million H1 2025 H1 2024 Change Constant currency
change
Revenue 1,658 1,569 6% 5%
Core revenue 1,657 1,569 6% 5%
Gross profit 715 756 (5)% (6)%
Gross margin 43.1% 48.2% (5.1)pp (5.2)pp
Core gross profit 724 756 (4)% (5)%
Core gross margin 43.7% 48.2% (4.5)pp (4.6)pp
Operating profit 259 351 (26)% (25)%
Operating margin 15.6% 22.4% (6.8)pp (6.5)pp
Core operating profit 373 402 (7)% (6)%
Core operating margin 22.5% 25.6% (3.1)pp (2.7)pp
Core EBITDA 429 453 (5)% (5)%
Core EBITDA margin 25.9% 28.9% (3.0)pp (2.7)pp
Group revenue grew 6%, reflecting good growth in the Branded and Injectables
businesses, offset by a slight decline in the Hikma Rx business.
Core gross profit declined 4% and core gross margin was 43.7%. The decline
reflects a change in the distribution of gross profit across the year compared
to 2024, when gross profit of Hikma Rx and Branded was strongly weighted to
the first half. In addition, this reflects the change in product and
geographic mix in the Injectables business.
Group reported operating expenses were $456 million (H1 2024: $405 million).
Group core operating expenses were $351 million (H1 2024: $354 million).
Group reported selling, general and administrative (SG&A) expenses were
$396 million (H1 2024: $325 million), reflecting a provision of $72 million
taken for a legal settlement. Core SG&A expenses were $278 million (H1
2024: $280 million). This reflects reduced commercial spend in Hikma Rx
following the out-licensing of Kloxxado(®), offset by normal course increases
in other businesses.
Core and reported R&D expenses were up 20% to $73 million (H1 2024: $61
million), representing 4.4% of revenue (H1 2024: 3.9%).
Reported other net operating income was $14 million (H1 2024: $19 million
expense). This includes $14 million non-core income from an insurance
settlement related the Group's business in Sudan. Core other net operating
income was $1 million (H1 2024: $13 million expense).
Group reported operating profit reduced by 26% and Group core operating profit
decreased by 7%, with a core operating margin of 22.5%.
Group revenue by business segment
$ million H1 2025 H1 2024
Injectables 683 41% 609 39%
Branded 437 26% 419 27%
Hikma Rx 523 32% 528 33%
Others 15 1% 13 1%
Total 1,658 1,569
Group revenue by region
$ million H1 2025 H1 2024
North America 975 59% 944 60%
MENA 554 33% 518 33%
Europe and ROW 129 8% 107 7%
Total 1,658 1,569
Injectables
$ million H1 2025 H1 2024 Change Constant currency change
Revenue 683 609 12% 12%
Gross profit 307 327 (6)% (6)%
Gross margin 44.9% 53.7% (8.8)pp (8.6)pp
Core gross profit 317 327 (3)% (3)%
Core gross margin 46.4% 53.7% (7.3)pp (7.2)pp
Operating profit 175 190 (8)% (4)%
Operating margin 25.6% 31.2% (5.6)pp (4.4)pp
Core operating profit 205 221 (7)% (4)%
Core operating margin 30.0% 36.3% (6.3)pp (5.0)pp
Injectables revenue grew 12% in the first half, benefitting from the breadth
of the portfolio, our broad geographic exposure and the contribution from
recent launches.
In North America we are benefitting from recently launched products as well as
the contribution from the Xellia portfolio. This has more than offset
increased competition on certain products.
In Europe and rest of world (ROW) we are seeing strong demand for our own
products, particularly in recently entered markets such as France, driven by
an expanding portfolio and market shortage dynamics. We continue to expect
sales from contract manufacturing to be weighted to the second half.
In MENA, our biosimilar portfolio continues to perform well and we are seeing
good progress with private market opportunities.
Injectables core gross profit was down 3% and core gross margin contracted to
46.4%. This decline was driven by a change in product and geographic mix,
including the dilutive impact of the Xellia portfolio, for which production is
currently outsourced, and ongoing competition on some of our higher margin
products in the US.
Injectables operating profit declined 8%. Injectables core operating profit
declined 7%, and core operating margin was 30.0%, down from 36.3% in H1 2024.
This reflects the gross profit movement as well as further costs related to
the appreciation of the Euro.
During H1 2025, the Injectables business launched 11 products in North
America, three in MENA, and 19 in Europe and ROW. We submitted 21 filings to
regulatory authorities across all markets. We further developed our portfolio
through new licensing agreements.
Branded
$ million H1 2025 H1 2024 Change Constant currency change
Revenue 437 419 4% 3%
Gross profit 232 232 0% (2)%
Gross margin 53.1% 55.4% (2.3)pp (2.6)pp
Core gross profit 232 232 0% (2)%
Core gross margin 53.1% 55.4% (2.3)pp (2.6)pp
Operating profit 143 126 13% 10%
Operating margin 32.7% 30.1% 2.6pp 2.0pp
Core operating profit 133 129 3% 1%
Core operating margin 30.4% 30.8% (0.4)pp (0.8)pp
Branded revenue grew 4%, with a good performance across our markets, against
an unusually high comparator period in H1 2024, due to the timing of tenders.
Branded reported and core gross profit were flat, with core gross margin
reducing slightly to 53.1%, reflecting the timing of higher margin oncology
tenders in H1 2024.
Branded reported operating profit increased 13%, which included non-core
income from an insurance settlement related to the Sudan business. Core
operating profit grew 3%, reflecting higher foreign exchange related costs in
2024. In constant currency, Branded core operating profit grew 1%.
During H1 2025, the Branded business launched 14 products and submitted 36
filings to regulatory authorities. Revenue from in-licensed products
represented 29% of Branded revenue (H1 2024: 28%).
Hikma Rx
$ million H1 2025 H1 2024 Change
Revenue 523 528 (1)%
Core revenue 522 528 (1)%
Gross profit 176 197 (11)%
Gross margin 33.7% 37.3% (3.6)pp
Core gross profit 175 197 (11)%
Core gross margin 33.5% 37.3% (3.8)pp
Operating profit 70 87 (20)%
Operating margin 13.4% 16.5% (3.1)pp
Core operating profit 92 104 (12)%
Core operating margin 17.6% 19.7% (2.1)pp
Hikma Rx revenue declined 1% in the first half. We saw good volume growth in
our inhalation portfolio, which helped to partially offset expected price
erosion.
The 11% reduction in Hikma Rx core and reported gross profit and the gross
margin contraction to 33.5% was primarily due to price erosion and a slight
increase in costs, as well as to a strong comparator period, as price erosion
in 2024 was realised in the second half of the year.
Hikma Rx reported operating profit declined 20%, and core operating profit
declined 12%. We have offset a meaningful increase in R&D spend by
reducing other costs, primarily sales and marketing spend.
During H1 2025, we launched three products and submitted three filings to
regulatory authorities.
Other businesses
Other businesses comprise our 503B compounding business, as well as Arab
Medical Containers (AMC), a manufacturer of plastic specialised medicinal
sterile containers, and International Pharmaceuticals Research Centre (IPRC),
which conducts bio-equivalency studies. Other businesses contributed revenue
of $15 million (H1 2024: $13 million) with a core operating loss of $4
million (H1 2024: $3 million loss) as we continue to invest in the development
of our compounding business.
Research and development
Our investment in R&D and business development is core to our strategy and
enables us to continue expanding the Group's product portfolio.
H1 2025 submissions H1 2025 approvals H1 2025 launches
Injectables 21 29 33
North America 3 15 11
MENA 15 5 3
Europe 3 9 19
Hikma Rx 3 2 3
Branded 36 22 14
Total 60 53 50
Net finance income/(expense)
H1 2025 H1 2024 Change Constant currency change
Finance income 75 4 1,775% 1,750%
Finance expense (40) (68) (41)% (40)%
Net finance income/(expense) 35 (64) (155)% (152)%
Core finance income 4 4 0% (25)%
Core finance expense (40) (44) (9)% (7)%
Core net finance expense (36) (40) (10)% (3)%
Reported net finance income was $35 million, compared with a net finance
expense of $64 million in 2024. Reported net finance income includes income of
$71 million resulting from amendments to royalty payment arrangements and
remeasurement of contingent consideration payment liabilities. Core net
finance expense was $36 million.
We continue to expect core net finance expense to be between $90 million to
$95 million for the full year.
Tax
The Group incurred a reported tax expense of $55 million (H1 2024: $59
million). Excluding the tax impact of exceptional items and other adjustments,
the Group core tax expense was $66 million in H1 2025 (H1 2024: $77 million).
The core effective tax rate(12) for H1 2025 was 19.5% (H1 2024: 21.2%). We
continue to expect the Group's core effective tax rate to be around 22% for
the full year.
Profit attributable to shareholders and earnings per share
Profit attributable to shareholders was $238 million (H1 2024: $226 million).
Core profit attributable to shareholders was $270 million (H1 2024: $283
million). Reported basic earnings per share was 108 cents (H1 2024: 102
cents). Core basic earnings per share was 122 cents (H1 2024: 128 cents).
Dividend
The Board is recommending an interim dividend of 36 cents per share (H1 2024:
32 cents per share). The interim dividend will be paid on Thursday 18
September 2025 to eligible shareholders on the register at the close of
business on Friday 15 August 2025.
Net cash flow, working capital and net debt
The Group generated operating cash flow of $161 million (H1 2024: $198
million).
Group working capital days were 259 at 30 June 2025. This compares to 240 days
at 31 December 2024 and 251 days at 30 June 2024.
Cash capital expenditure was $68 million (H1 2024: $69 million). In the US,
$21 million was spent on upgrades and capacity expansion across our Cherry
Hill, Bedford and Columbus sites. In MENA, $35 million was spent strengthening
and expanding our local manufacturing sites across our markets. In Europe, we
spent $12 million enhancing and expanding our manufacturing capabilities in
Portugal.
We continue to expect Group capital expenditure to be around $170 million to
$190 million in 2025.
The Group's total debt was $1,558 million at 30 June 2025 (31 December 2024:
$1,306 million; 30 June 2024: $1,276 million), reflecting higher debt
utilisation to fund the Xellia acquisition and the acquisition of brand rights
from Takeda.
The Group's cash balance was $236 million at 30 June 2025 (31 December 2024:
$188 million). The Group's net debt was $1,322 million at 30 June 2025 (31
December 2024: $1,118 million)(13). We continue to have a strong balance sheet
with a net debt to core EBITDA ratio of 1.7x (31 December 2024: 1.4x).
On 8 July 2025, the Group issued a new $500 million five-year Eurobond with a
5.125% coupon rate to refinance the previously issued $500 million five-year
Eurobond, which had a 3.25% coupon rate and matured on 9 July 2025.
On 15 July 2025, the Group signed a $250 million six-year loan agreement with
International Finance Corporation (IFC).
Net assets
Net assets at 30 June 2025 were $2,551 million (31 December 2024: $2,321
million). Net current assets were $501 million (31 December 2024: $285
million).
Statement of Directors' responsibilities
The Directors confirm that these condensed interim financial statements have
been prepared in accordance with International Accounting Standard 34,
'Interim Financial Reporting' (IAS 34), as issued by the International
Accounting Standards Board (IASB), UK adopted IAS 34 and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority and that the interim management report includes a fair
review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
· an indication of important events that have occurred during the first
six months and their impact on the condensed set of financial statements, and
a description of the principal risks and uncertainties for the remaining six
months of the financial year; and
· material related-party transactions in the first six months and any
material changes in the related-party transactions described in the last
annual report.
The maintenance and integrity of the Hikma Pharmaceuticals PLC website is the
responsibility of the Directors; the work carried out by the auditors does not
involve consideration of these matters and, accordingly, the auditors accept
no responsibility for any changes that might have occurred to the interim
financial statements since they were initially presented on the website.
By order of the Board
Said Darwazah Riad Mishlawi
Executive Chairman Chief Executive Officer
6 August 2025 6 August 2025
The Board of Directors that served during all or part of the six-month period
to 30 June 2025 and their respective responsibilities can be found on the
Leadership team section of www.hikma.com (http://www.hikma.com) . This
excludes John Castellani, who stepped down from his position as a
Non-Executive Director on 24 April 2025.
Cautionary statement
This Interim Results announcement has been prepared solely to provide
additional information to the shareholders of Hikma and should not be relied
on by any other party or for any other purpose.
Definitions
We use a number of non-IFRS measures to report and monitor the performance of
our business. Management uses these adjusted numbers internally to measure our
progress and for setting performance targets. We also present these numbers,
alongside our reported results, to external audiences to help them understand
the underlying performance of our business. Our core numbers may be calculated
differently to other companies.
Adjusted measures are not substitutable for IFRS results and should not be
considered superior to results presented in accordance with IFRS.
Core results
Reported results represent the Group's overall performance. However, these
results can include one-off or non-cash items which are excluded when
assessing the underlying performance of the Group. To provide a more complete
picture of the Group's performance to external audiences, we provide,
alongside our reported results, core results, which are a non-IFRS measure.
Our core results exclude exceptional items and other adjustments set out in
Note 5.
Constant currency
As the majority of our business is conducted in the US, we present our results
in US dollars. For both our Branded and Injectable businesses, a proportion of
their sales are denominated in currencies other than the US dollar. In
order to illustrate the underlying performance of these businesses, we include
information on our results in constant currency.
Constant currency numbers in H1 2025 represent reported H1 2025 numbers
translated using H1 2024 exchange rates, excluding price increases in the
business resulting from the devaluation of currencies.
Core EBITDA
Core EBITDA is reported operating profit before depreciation, amortisation on
software, adjusted for exceptional items and other adjustments recognised
within reported operating profit.
H1 2025 H1 2024
$ million $ million
Reported operating profit 259 351
Depreciation 51 47
Amortisation 49 49
Impairment charges 7 6
Reorganisation costs 2 -
Pre-production setup costs 10 -
Provision for rebates adjustment (1) -
Provision for legal settlement 72 -
Gain on extinguishment of financial liability (6) -
Insurance compensation in relation to the Group's investment losses in Sudan (14) -
Core EBITDA 429 453
Core EBITDA for the twelve months ending 30 June 2025, which is used in the
calculation of net debt to core EBITDA, was $800 million.
Working capital days
We believe Group working capital days provides a useful measure of the Group's
working capital management and liquidity. Group working capital days are
calculated as Group receivable days plus Group inventory days, less Group
payable days. Group receivable days are calculated as Group trade receivables
x 365, divided by trailing 12 months Group revenue. Group inventory days are
calculated as Group inventory x 365 divided by trailing 12 months Group
reported cost of sales. Group payable days are calculated as Group trade
payables x 365, divided by trailing 12 months Group reported cost of
sales(14).
Group net debt
We believe Group net debt is a useful measure of the strength of the Group
financial position. Group net debt includes long and short-term financial
debts (Note 10), lease liabilities, net of cash and cash equivalents and
restricted cash (if any).
Group net debt Jun-25 Dec-24
$ million
Short-term financial debts (706) (642)
Short-term lease liabilities (10) (11)
Long-term financial debts (798) (607)
Long-term lease liabilities (44) (46)
Total debt (1,558) (1,306)
Cash 236 188
Net debt (1,322) (1,118)
Forward looking statements
This announcement contains certain statements which are, or may be deemed to
be, "forward looking statements" which are prospective in nature with respect
to Hikma's expectations and plans, strategy, management objectives, future
developments and performance, costs, revenues and other trend
information. All statements other than statements of historical fact may be
forward-looking statements. Often, but not always, forward-looking statements
can be identified by the use of forward looking words such as "intends",
"believes", "anticipates", "expects", "estimates", "forecasts", "targets",
"aims", "budget", "scheduled" or words or terms of similar substance or the
negative thereof, as well as variations of such words and phrases or
statements that certain actions, events or results "may", "could", "should",
"would", "might" or "will" be taken, occur or be achieved.
By their nature, forward looking statements are based on current expectations
and projections about future events and are therefore subject to assumptions,
risks and uncertainties that are beyond Hikma's ability to control or estimate
precisely and which could cause actual results or events to differ materially
from those expressed or implied by the forward looking statements. Where
included, such statements have been made by or on behalf of Hikma in good
faith based upon the knowledge and information available to the Directors on
the date of this announcement. Accordingly, no assurance can be given that any
particular expectation will be met and Hikma's shareholders are cautioned not
to place undue reliance on the forward-looking statements. Forward looking
statements contained in this announcement regarding past trends or activities
should not be taken as a representation that such trends or activities will
continue in the future.
Other than in accordance with its legal or regulatory obligations (including
under the Market Abuse Regulation ((EU) No. 596/2014) and the UK Listing Rules
and the Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority), Hikma does not undertake to update the forward looking statements
contained in this announcement to reflect any changes in events, conditions or
circumstances on which any such statement is based or to correct any
inaccuracies which may become apparent in such forward looking
statements. Except as expressly provided in this announcement, no forward
looking or other statements have been reviewed by the auditors of Hikma. All
subsequent oral or written forward looking statements attributable to Hikma or
any of its members, directors, officers or employees or any person acting on
their behalf are expressly qualified in their entirety by the cautionary
statement above. Past share performance cannot be relied on as a guide to
future performance. Nothing in this announcement should be construed as a
profit forecast.
Neither the content of Hikma's website nor any other website accessible by
hyperlinks from Hikma's website are incorporated in, or form part of, this
announcement.
Principal risks and uncertainties
The Group faces risks from a range of sources that could have a material
impact on our financial commitments and ability to trade in the future. The
principal risks are determined via robust assessment considering our risk
context by the Board of Directors with input from executive management.
During the first half of 2025, the US administration's trade strategy
involving the introduction of tariffs on direct imports has been closely
monitored. The situation remains dynamic. Hikma continues to assess the
situation and take mitigating actions where appropriate.
In addition, Hikma has closely monitored the conflict in the Middle East and
responded to ensure the safety of our people, and to mitigate potential
disruptions to shipping and operations. The situation is managed by local,
regional and group management teams across multiple principal risk areas,
overseen by the Executive Committee and Board.
The principal risks facing the company have not materially changed in the last
six months, and are set out in the 2024 annual report on pages 82 - 86. The
Board recognises that certain risk factors that influence the principal risks
are outside of the control of management. The Board is satisfied that the
principal risks are being managed appropriately and consistently with the
target risk appetite. The set of principal risks should not be considered as
an exhaustive list of all the risks the Group faces.
Principal risks What does the risk cover?
Industry dynamics The commercial viability of the industry and business model we operate may
change significantly as a result of geopolitical instability and conflict,
macroeconomic and trade factors, local political action, societal pressures,
regulatory interventions or changes to participants in the value chain of the
industry.
Product pipeline Selecting, developing and registering new products that meet market needs and
regulations, aligned with Hikma's strategy to provide a continuous source of
future growth.
People Developing, maintaining and adapting organisational structures, management
processes and controls, and talent attraction and retention to enable
effective delivery by the business in the face of rapid and constant internal
and external change.
Reputation Building and maintaining trusted relationships with our stakeholders relies on
developing and sustaining our reputation as one of our most valuable
assets.
Ethics and compliance Maintaining a culture underpinned by ethical decision-making, with appropriate
internal controls to ensure staff and third parties comply with our Code of
Conduct, associated policies and procedures, as well as all applicable
legislation.
Information and cyber security, technology and infrastructure Ensuring the integrity, confidentiality, availability and resilience of data,
securing information stored and/or processed internally or externally from
cyber and non-cyber threats, maintaining and developing technology systems
that enable business processes, and ensuring infrastructure supports the
organisation effectively.
Legal, regulatory and intellectual property Complying with laws and regulations, and advising on their application.
Managing litigation, governmental investigations, sanctions, contractual terms
and conditions and adapting to their changes while preserving shareholder
value, business integrity and reputation.
Inorganic growth Identifying, accurately pricing and realising expected benefits from
acquisitions or divestments, licensing, or other business development
activities.
Active pharmaceutical ingredient (API) and third-party risk management Maintaining availability of supply, quality and competitiveness of API
purchases and ensuring proper understanding and control of third-party risks.
Crisis and continuity management Developing, maintaining and adapting capabilities and processes to anticipate,
prepare for, respond and adapt to sudden disruptions and gradual change,
including geopolitical instability and conflict, natural catastrophe, economic
turmoil, cyber events, operational issues, pandemic, political crisis, and
regulatory intervention.
Product quality and safety Maintaining compliance with current Good Practices for Manufacturing (cGMP),
Laboratory (cGLP), Clinical (cGCP), Compounding (cGCP), Distribution (cGDP)
and Pharmacovigilance (cGVP) by staff, and ensuring compliance is maintained
by all relevant third parties involved in these processes.
Financial control and reporting Effectively managing income, expenditure, assets and liabilities, liquidity,
exchange rates, tax uncertainty, debtor and associated activities, and
reporting accurately, in a timely manner and in compliance with statutory
requirements and accounting standards.
1 Throughout this document, H1 2025 refers to the six months ended 30 June
2025 and H1 2024 refers to the six months ended 30 June 2024.
2 Constant currency numbers in H1 2025 represent reported H1 2025 numbers
translated using H1 2024 exchange rates, excluding price increases in the
business resulting from the devaluation of currencies.
(3) Core results throughout the document are presented to show the underlying
performance of the Group, excluding exceptional items and other adjustments
set out in Note 5. Core results are a non-IFRS measure.
4 Core EBITDA is reported operating profit before depreciation, amortisation
on software, adjusted for exceptional items and other adjustments recognised
within reported operating profit.
5 During the first half, the business formerly known as Generics was renamed
Hikma Rx
6 Group net debt is calculated as Group total debt less Group total cash.
Group net debt is a non-IFRS measure that includes long and short-term
financial debts (Note 10), lease liabilities, net of cash and cash equivalents
and restricted cash, if any. See page 14 for a reconciliation of Group net
debt to reported IFRS figures
7 For the purposes of the leverage calculation, core EBITDA is calculated for
trailing twelve months ended 30 June 2025. See page 13 for a reconciliation to
reported IFRS results and core EBITDA
8 IQVIA MAT June 2025, generic injectable volumes by eaches, excluding branded
generics and Becton Dickinson
9 Based on internal analysis by using data from the following source: IQVIA
MIDAS® Monthly Value Sales data for Algeria, Egypt, Jordan, Kuwait, Lebanon,
Morocco, Saudi Arabia, Tunisia and UAE, for the period: calendar year 2024,
reflecting estimates of real-world activity. Copyright IQVIA. All rights
reserved
10 IQVIA Injectable generic products, Hospital + Germany Retail, 2024 USD
sales
11 Group revenue includes $44 million contribution from products acquired
through the Xellia acquisition, which closed on 10 September 2024. These
revenues are recognised under Injectables
12 Core effective tax rate is calculated as core tax expense as a percentage
of core profit before tax
13 See page 14 for a reconciliation of Group net debt to reported IFRS results
(14)Trailing 12 months Group revenue is calculated as Group revenue for the 12
months ending 30 June 2025 which equates to $3,216 million. Trailing 12
months Group reported cost of sales is calculated as Group reported cost of
sales for the 12 months ending 30 June 2025 which equates to $1,842 million
Independent review report to Hikma Pharmaceuticals PLC
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Hikma Pharmaceuticals PLC's condensed consolidated interim
financial statements (the "interim financial statements") in the Interim
Results of Hikma Pharmaceuticals PLC for the 6 month period ended
30 June 2025 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with International Accounting Standard 34,
'Interim Financial Reporting' (IAS 34), as issued by the International
Accounting Standards Board (IASB), UK adopted IAS 34 and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
The interim financial statements comprise:
· the Condensed consolidated interim balance sheet as at
30 June 2025;
· the Condensed consolidated interim income statement and the
Condensed consolidated interim statement of comprehensive income for the
period then ended;
· the Condensed consolidated interim statement of changes in equity
for the period then ended;
· the Condensed consolidated interim cash flow statement for the
period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the Interim Results of Hikma
Pharmaceuticals PLC have been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting' (IAS 34), as issued by
the International Accounting Standards Board (IASB), UK adopted IAS 34 and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the Interim Results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the Directors have
inappropriately adopted the going concern basis of accounting or that the
Directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the Group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the Directors
The Interim Results, including the interim financial statements, is the
responsibility of, and has been approved by the Directors. The Directors are
responsible for preparing the Interim Results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the Interim Results, including the
interim financial statements, the Directors are responsible for assessing the
Group's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to
cease operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Interim Results based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion,
has been prepared for and only for the Company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We do not, in
giving this conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
6 August 2025
Hikma Pharmaceuticals PLC
Condensed consolidated interim income statement
H1 2025 H1 2025 H1 2025 H1 2024 H1 2024 H1 2024
Core
Exceptional items and other adjustments
Reported results
Core
Exceptional items and other adjustments
Reported results
results
(Note 5)
results
(Note 5)
Note $m (Unaudited) $m (Unaudited) $m (Unaudited) $m (Unaudited) $m (Unaudited) $m (Unaudited)
Revenue 3 1,657 1 1,658 1,569 - 1,569
Cost of sales (933) (10) (943) (813) - (813)
Gross profit/(loss) 724 (9) 715 756 - 756
Selling, general and administrative expenses (278) (118) (396) (280) (45) (325)
Impairment loss on financial assets, net (1) - (1) - - -
Research and development expenses (73) - (73) (61) - (61)
Other operating expenses (8) (7) (15) (14) (6) (20)
Other operating income 9 20 29 1 - 1
Total operating expenses (351) (105) (456) (354) (51) (405)
Operating profit/(loss) 4 373 (114) 259 402 (51) 351
Finance income 4 71 75 4 - 4
Finance expense (40) - (40) (44) (24) (68)
Gain from investments at fair value 1 - 1 - - -
through profit or loss (FVTPL)
Group's share of profit of joint venture - - - 1 - 1
Profit/(loss) before tax 338 (43) 295 363 (75) 288
Tax 6 (66) 11 (55) (77) 18 (59)
Profit/(loss) for the half-year 272 (32) 240 286 (57) 229
Attributable to:
Non-controlling interests 2 - 2 3 - 3
Equity holders of the parent 270 (32) 238 283 (57) 226
272 (32) 240 286 (57) 229
Earnings per share (cents)
Basic 122 108 128 102
Diluted 121 107 127 101
Hikma Pharmaceuticals PLC
Condensed consolidated interim statement of comprehensive income
H1 2025 H1 2025 H1 2025 H1 2024 H1 2024 H1 2024
Core
Exceptional items and other adjustments
Reported results
Core
Exceptional items and other adjustments
Reported results
results
(Note 5)
results
(Note 5)
$m (Unaudited) $m (Unaudited) $m (Unaudited) $m (Unaudited) $m (Unaudited) $m (Unaudited)
Profit for the half-year 272 (32) 240 286 (57) 229
Other comprehensive income/(expense)
Items that may subsequently be reclassified to the consolidated income
statement, net of tax:
Currency translation movement 92 - 92 (41) - (41)
Items that will not subsequently be reclassified to the consolidated income
statement:
Change in investments at fair value through other comprehensive income (10) - (10) (5) - (5)
(FVTOCI)
Total other comprehensive income/(expense) for the half-year 82 - 82 (46) - (46)
Total comprehensive income for the half-year 354 (32) 322 240 (57) 183
Attributable to:
Non-controlling interests 2 - 2 3 - 3
Equity holders of the parent 352 (32) 320 237 (57) 180
354 (32) 322 240 (57) 183
Hikma Pharmaceuticals PLC
Condensed consolidated interim balance sheet
30 June 31 December
2025
2024
Note $m $m
(Unaudited)
(Audited)
Non-current assets
Goodwill 393 382
Other intangible assets 8 824 774
Property, plant and equipment 1,329 1,278
Right-of-use assets 44 48
Investment in joint venture 11 11
Deferred tax assets 294 293
Financial and other non-current assets 102 84
2,997 2,870
Current assets
Inventories 1,082 986
Income tax recoverable 37 24
Trade and other receivables 1,069 949
Cash and cash equivalents 236 188
Other current assets 133 116
2,557 2,263
Total assets 5,554 5,133
Current liabilities
Short-term financial debts 10 706 642
Lease liabilities 10 11
Trade and other payables 611 650
Income tax payable 86 78
Provisions 12 194 122
Other current liabilities 9 449 475
2,056 1,978
Net current assets 501 285
Non-current liabilities
Long-term financial debts 10 798 607
Lease liabilities 44 46
Deferred tax liabilities 17 18
Provisions 12 36 36
Other non-current liabilities 11 52 127
947 834
Total liabilities 3,003 2,812
Net assets 2,551 2,321
Equity
Share capital 40 40
Share premium 282 282
Other reserves (256) (374)
Retained earnings 2,472 2,362
Equity attributable to equity holders of the parent 2,538 2,310
Non-controlling interests 13 11
Total equity 2,551 2,321
The condensed consolidated interim financial information of Hikma
Pharmaceuticals PLC for the six-month period ended 30 June 2025 was approved
by the Board of Directors on 6 August 2025 and signed on its behalf by:
Said
Darwazah
Riad Mishlawi
Executive
Chairman
Chief Executive Officer
6 August 2025
Hikma Pharmaceuticals PLC
Condensed consolidated interim statement of changes in equity
Share Share premium Other reserves Retained earnings Equity attributable to equity shareholders of the parent Non-controlling interests Total
capital
equity
Merger and revaluation reserves Translation reserve Capital redemption reserve Employee Total other reserves
benefit
trust (EBT)
reserve (1)
Note $m $m $m $m $m $m $m $m $m $m $m
Balance at 31 December 2023 (audited) and 1 January 2024 40 282 35 (319) 2 - (282) 2,158 2,198 11 2,209
Profit for the half-year - - - - - - - 226 226 3 229
Change in the fair value of investments at FVTOCI - - - - - - - (5) (5) - (5)
Currency translation movement - - - (41) - - (41) - (41) - (41)
Total comprehensive income for the half-year - - - (41) - - (41) 221 180 3 183
Total transactions with owners, recognised directly in equity
Cost of equity-settled employee share scheme - - - - - - - 15 15 - 15
Purchase of shares held in employee benefit trust (EBT) - - - - - (3) (3) - (3) - (3)
Dividends paid 7 - - - - - - - (104) (104) - (104)
Balance at 30 June 2024 (unaudited) 40 282 35 (360) 2 (3) (326) 2,290 2,286 14 2,300
Balance at 31 December 2024 (audited) and 1 January 2025 40 282 35 (374) 2 (37) (374) 2,362 2,310 11 2,321
Profit for the half-year - - - - - - - 238 238 2 240
Change in the fair value of investments at FVTOCI - - - - - - - (10) (10) - (10)
Currency translation movement - - - 92 - - 92 - 92 - 92
Total comprehensive income for the half-year - - - 92 - - 92 228 320 2 322
Total transactions with owners, recognised directly in equity
Cost of equity-settled employee share scheme - - - - - - - 16 16 - 16
Purchase of shares held in employee benefit trust (EBT) - - - - - (2) (2) - (2) - (2)
Exercise of equity-settled employee share scheme - - - - - 28 28 (28) - - -
Dividends paid 7 - - - - - - - (106) (106) - (106)
Balance at 30 June 2025 (unaudited) 40 282 35 (282) 2 (11) (256) 2,472 2,538 13 2,551
1. The cost of shares purchased and held by the Employee Benefit Trust (EBT)
during the period ended 30 June 2024 has been reclassified from retained
earnings to the EBT reserve within equity
Hikma Pharmaceuticals PLC
Condensed consolidated interim cash flow statement
H1 H1
2025
2024
Note $m (Unaudited) $m (Unaudited)
Cash flows from operating activities
Cash generated from operations 13 221 234
Income taxes paid (60) (36)
Net cash inflow from operating activities 161 198
Cash flow from investing activities
Purchase of property, plant and equipment (68) (69)
Proceeds from disposal of property, plant and equipment 1 -
Purchase of intangible assets (104) (39)
Additions of investments at FVTOCI (2) (2)
Deposit received related to asset held for sale - 1
Payments of contingent consideration liability (45) (1)
Interest income received 3 4
Net cash outflow from investing activities (215) (106)
Cash flow from financing activities
Proceeds from issue of long-term financial debts 402 211
Repayment of long-term financial debts (214) (148)
Proceeds from short-term borrowings 182 253
Repayment of short-term borrowings (123) (219)
Repayment of lease liabilities (4) (16)
Dividends paid 7 (106) (104)
Interest and bank charges paid (37) (38)
Decrease in restricted cash - 10
Purchase of shares held in employee benefit trust (EBT) (2) -
Payment to co-development and earnout payment agreement - (1)
Net cash inflow (outflow) from financing activities 98 (52)
Net increase in cash and cash equivalents 44 40
Cash and cash equivalents at beginning of the half-year 188 205
Foreign exchange translation movements 4 (9)
Cash and cash equivalents at end of the half-year 236 236
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements
1. General information
Hikma Pharmaceuticals PLC is a public limited liability company incorporated
and domiciled in the United Kingdom under the Companies Act 2006. The
registered office address is 1 New Burlington Place, London W1S 2HR, UK.
The Group's principal activities are the development, manufacture and
commercialisation of a broad range of generic, specialty and branded
pharmaceutical products across a range of dosage forms.
2. Basis of preparation and accounting policies
The unaudited condensed consolidated interim financial statements (financial
statements) for the six months ended 30 June 2025 have been prepared on a
going concern basis in accordance with International Accounting Standard 34,
'Interim Financial Reporting' (IAS 34), as issued by the International
Accounting Standards Board (IASB), UK adopted IAS 34 and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
The condensed consolidated interim financial statements do not include all of
the notes of the type normally included in annual financial statements.
Accordingly, this report is to be read in conjunction with the consolidated
financial statements for the year ended 31 December 2024, which have been
prepared in accordance with:
I. UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting
under those standards.
II. International Financial Reporting Standards as issued by the
International Accounting Standards Board ("IFRS Accounting Standards").
The financial information does not constitute statutory accounts as defined in
section 435 of the Companies Act 2006. A copy of the statutory accounts for
2024 has been delivered to the Registrar of Companies. The auditors' report on
those accounts was unqualified, did not draw attention to any matters by way
of emphasis and did not contain any statement under Section 498 (2) or (3) of
the Companies Act 2006. These interim financial statements have been reviewed,
not audited.
The currency used in the presentation of the accompanying financial statements
is the US dollar ($) as most of the Group's business is conducted in US
dollars.
The accounting policies adopted in the preparation of the financial statements
are consistent with those followed in the
preparation of the Group's annual consolidated financial statements for the
year ended 31 December 2024 with the exception of the adoption of the new
revised standard set out below, as well as the estimates required in
determining the provision for income taxes in accordance with IAS 34 as of 30
June 2025.
New standards, interpretations and amendments
The following revised Standard and Interpretation has been issued and is
effective for annual periods beginning on 1 January 2025. The Group has not
early adopted any other standard, interpretation or amendment that has been
issued but is not yet effective.
IAS 21 (Amendments) Lack of Exchangeability
This amendment had no significant impact on the condensed consolidated interim
financial statements of the Group but may impact the accounting for future
transactions and arrangements.
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
2. Basis of preparation and accounting policies continued
Going concern
The Directors have considered the going concern position of the Group at 30
June 2025. The Directors believe that the Group is well diversified due to its
geographic spread, product diversity and large customer and supplier base. The
Group's business activity, together with the factors likely to affect its
future development, performance and position are set out in these Interim
Results. The Interim Results also include a summary of the financial position,
cash flow and borrowing facilities. At 30 June 2025 the Group had undrawn long
term committed banking facilities of $695 million. The Group's total debt at
30 June 2025 was $1,558 million while the Group's cash and cash equivalents at
30 June 2025 were $236 million making the net debt(1) $1,322 million. The
Group's net debt to trailing core EBITDA of $800 million ratio was 1.7x at 30
June 2025 (31 December 2024: 1.4x). Taking into account the Group's current
position and its principal risks for a period of at least 12 months from the
date of this results announcement, a going concern assessment has been
prepared using realistic scenarios, including a combined severe but plausible
downside risk scenario considering specific risks facing the business related
to maintenance of certain product prices, launch and commercialisation of new
products and political stability. This assessment demonstrated sufficient
liquidity headroom. Therefore, the Directors believe that the Group is
adequately placed to manage its business and financing risks successfully,
despite the current uncertain economic and geo-political outlook. Having
reassessed the principal risks, the Directors have concluded it is appropriate
to adopt the going concern basis of accounting in preparing the interim
financial information and there is no material uncertainty requiring
disclosure in this regard.
Covenants on major financial debt arrangements are suspended while the Group
retains its investment grade status from two rating agencies. During the
period ended 30 June 2025, the Group's investment grade rating was upgraded by
S&P and Fitch to BBB.
1. Net debt includes long and short-term financial debts and
lease liabilities, net of cash and cash equivalents and restricted cash, (if
any)
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
3. Revenue from contracts with customers
Business and geographical markets
The following table provides an analysis of the Group's reported revenue by
segment and geographical market, irrespective of the origin of the
goods/services:
Injectables Hikma Rx(1) Branded Others Total
H1 2025 (unaudited) $m $m $m $m $m
North America 446 523 - 6 975
Middle East and North Africa 115 - 433 6 554
Europe and Rest of the World 114 - 4 3 121
United Kingdom 8 - - - 8
683 523 437 15 1,658
Injectables Hikma Rx(1) Branded Others Total
H1 2024 (unaudited) $m $m $m $m $m
North America 412 528 - 4 944
Middle East and North Africa 99 - 413 6 518
Europe and Rest of the World 92 - 6 3 101
United Kingdom 6 - - - 6
609 528 419 13 1,569
The top selling markets are shown below:
H1 2025 H1 2024
$m $m
(Unaudited) (Unaudited)
United States 962 929
Saudi Arabia 171 145
Algeria 120 129
1,253 1,203
In H1 2025, revenue arising from Hikma Rx and Injectables segments included
sales the Group made to three wholesalers, each accounting for equal to or
greater than 10% of the Group's revenue: $201 million (12% of Group revenue),
$180 million (11% of Group revenue) and $177 million (11% of Group revenue).
In H1 2024, revenue included sales made to two wholesalers, each accounting
for equal to or greater than 10% of the Group's revenue: $200 million (13% of
Group revenue) and $178 million (11% of Group revenue).
1. During the first half, the Group renamed its Generics segment to Hikma Rx
4. Business segments
For management reporting purposes, the Group is organised into three principal
operating divisions - Injectables, Hikma Rx and Branded. These divisions
are the basis on which the Group reports its segmental information.
Core operating profit, defined as 'segment result', is the principal measure
used in the decision-making and resource allocation process of the chief
operating decision maker, who is the Group's Chief Executive Officer.
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
4. Business segments continued
Information regarding the Group's operating segments is reported below:
Injectables H1 2025 H1 2025 H1 2025 Reported H1 2024 H1 2024 H1 2024 Reported
Core
Exceptional items and other adjustments
results
Core
Exceptional items and other adjustments
results
results
(note 5)
$m (Unaudited)
results
(note 5)
$m (Unaudited)
$m
$m
$m
$m
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Revenue 683 - 683 609 - 609
Cost of sales (366) (10) (376) (282) - (282)
Gross profit/(loss) 317 (10) 307 327 - 327
Total operating expenses (112) (20) (132) (106) (31) (137)
Segment result 205 (30) 175 221 (31) 190
Hikma Rx(1) H1 2025 H1 2025 H1 2025 Reported H1 2024 H1 2024 H1 2024 Reported
Core
Exceptional items and other adjustments
results
Core
Exceptional items and other adjustments
results
results
(note 5)
$m (Unaudited)
results
(note 5)
$m (Unaudited)
$m
$m
$m
$m
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Revenue 522 1 523 528 - 528
Cost of sales (347) - (347) (331) - (331)
Gross profit 175 1 176 197 - 197
Total operating expenses (83) (23) (106) (93) (17) (110)
Segment result 92 (22) 70 104 (17) 87
Branded H1 2025 H1 2025 H1 2025 Reported H1 2024 H1 2024 H1 2024 Reported
Core
Exceptional items and other adjustments
results
Core
Exceptional items and other adjustments
results
results
(note 5)
$m (Unaudited)
results
(note 5)
$m (Unaudited)
$m
$m
$m
$m
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Revenue 437 - 437 419 - 419
Cost of sales (205) - (205) (187) - (187)
Gross profit 232 - 232 232 - 232
Total operating expenses (99) 10 (89) (103) (3) (106)
Segment result 133 10 143 129 (3) 126
Others(2) H1 2025 H1 2025 H1 2025 Reported H1 2024 H1 2024 H1 2024 Reported
Core
Exceptional items and other adjustments
results
Core
Exceptional items and other adjustments
results
results
(note 5)
$m (Unaudited)
results
(note 5)
$m (Unaudited)
$m
$m
$m
$m
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Revenue 15 - 15 13 - 13
Cost of sales (15) - (15) (13) - (13)
Gross profit - - - - - -
Total operating expenses (4) - (4) (3) - (3)
Segment result (4) - (4) (3) - (3)
1. During the first half, the Group renamed its Generics segment to Hikma Rx
2. Others mainly comprise Arab Medical Containers LLC, International
Pharmaceutical Research Center LLC and the 503B compounding business
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
4. Business segments continued
Group H1 2025 H1 2025 H1 2025 Reported H1 2024 H1 2024 H1 2024 Reported
Core
Exceptional items and other adjustments
results
Core
Exceptional items and other adjustments
results
results
(note 5)
$m
results
(note 5)
$m
$m
$m
(Unaudited)
$m
$m
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Segments' results 426 (42) 384 451 (51) 400
Unallocated expenses(1) (53) (72) (125) (49) - (49)
Operating profit/(loss) 373 (114) 259 402 (51) 351
Finance income 4 71 75 4 - 4
Finance expense (40) - (40) (44) (24) (68)
Loss from investment at fair value 1 - 1 - - -
through profit or loss (FVTPL)
Group's share of profit of joint venture - - - 1 - 1
Profit/(loss) before tax 338 (43) 295 363 (75) 288
Tax (66) 11 (55) (77) 18 (59)
Profit/(loss) for the half-year 272 (32) 240 286 (57) 229
Attributable to:
Non-controlling interests 2 - 2 3 - 3
Equity holders of the parent 270 (32) 238 283 (57) 226
272 (32) 240 286 (57) 229
1. Reported unallocated corporate expenses mainly comprise provision for legal
settlements, employee costs and professional fees. The increase compared to
the prior period is primarily attributable to the provision for legal
settlements recognised in H1 2025 (Note 5)
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
5. Exceptional items and other adjustments
Exceptional items and other adjustments are disclosed separately in the
condensed consolidated income statement to assist in the understanding of the
Group's core performance.
H1 2025 Injectables Branded Hikma Rx Unallocated Total Tax effect Impact on
profit for
the period
$m $m $m $m $m $m $m
Exceptional items and other adjustments
Provision for legal settlements SG&A - - - (72) (72) 18 (54)
Insurance compensation in relation to the Group's losses in Sudan Other operating - 14 - - 14 (3) 11
income
Pre-production setup costs Cost of sales (10) - - - (10) 2 (8)
Gain on extinguishment of financial liability Other operating 6 - - - 6 (1) 5
income
Reorganisation costs SG&A (1) - (1) - (2) - (2)
Provision for rebates adjustment Revenue - - 1 - 1 - 1
Intangible assets amortisation other than software SG&A (25) (3) (16) - (44) 8 (36)
Impairment charge on intangible assets and property, plant and equipment Other operating - (1) (6) - (7) 2 (5)
expenses
Remeasurement of contingent consideration liabilities Finance income - - - 71 71 (15) 56
Exceptional items and other adjustments (30) 10 (22) (1) (43) 11 (32)
- Provision for legal settlements: The Group reached an agreement to resolve
all antitrust lawsuits brought against Hikma Pharmaceuticals USA Inc. by
third-parties in the US who have purchased or been billed for Xyrem® (Sodium
Oxybate). The agreed-upon settlement is not an admission of wrongdoing or
legal liability. The Group booked a total provision of approximately $72
million to cover the agreed settlement amount for all related cases. These
matters have been previously disclosed as contingent liabilities (Note 12)
- $14 million represents insurance compensation in relation to the Group's
losses in Sudan in a prior period
- Pre-production setup costs: $10 million related to the manufacturing plant
acquired through the Xellia business combination in 2024. These costs are
incurred during the pre-operational phase where commissioning and
refurbishment of the plant is taking place. These activities are expected to
be completed by the end of 2026, with further costs expected to be incurred in
H2 2025 and 2026
- Gain on extinguishment of financial liability: $6 million resulting from a
settlement agreement that reduced a financial liability related to the
acquisition of a product-related intangible asset that was previously impaired
- Reorganisation costs: $2 million of reorganisation costs related to a
global restructuring program that started in 2024. Completion of these
activities is projected in 2025, with an estimated additional cost of
approximately $3 million. This program will improve efficiencies across
various Group functions, including R&D activities benefitting from the
integration of Xellia business combination
- Provision for rebates adjustment: $1 million represents a change in
historical estimates in relation to prior years rebates
- Intangible assets amortisation other than software of $44 million
- Impairment charge on intangible assets and property, plant and equipment:
$7 million of impairment charge mainly related to a product-related intangible
asset due to the discontinuation of a pipeline product
- Remeasurement of contingent considerations liabilities: $71 million
represents finance income which primarily resulted from the adjustment of
royalty payment arrangements with certain of the Group's business partners, as
well as the revaluation of liabilities associated with future contingent
consideration payments recognised through business combinations (Notes 9, 11
and 15)
Tax effect
- The tax effect represents the tax effect on pre-tax exceptional items and
other adjustments which is calculated based on the applicable tax rate in each
jurisdiction.
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
5. Exceptional items and other adjustments continued
H1 2024 Injectables Branded Hikma Rx Unallocated Total Tax effect Impact on
profit for
the period
$m $m $m $m $m $m $m
Exceptional items and other adjustments
Intangible assets amortisation other than software SG&A (25) (3) (17) - (45) 12 (33)
Impairment charge on property, plant and equipment and intangible assets Other operating (6) - - - (6) 1 (5)
expenses
Remeasurement of contingent consideration and other financial liability Finance expense - - - (23) (23) 5 (18)
Unwinding of contingent consideration and other financial liability Finance expense - - - (1) (1) - (1)
Exceptional items and other adjustments (31) (3) (17) (24) (75) 18 (57)
- Intangible assets amortisation other than software of $45 million
- Impairment charge on property, plant and equipment and intangible assets:
$6 million of impairment charge mainly relates to machinery and equipment
associated with discontinued projects
- Remeasurement of contingent consideration and other financial liability:
$23 million primarily represents the finance expense resulting from the
valuation of the liabilities associated with the future contingent payments in
respect of contingent consideration recognised through business combinations
- Unwinding of contingent consideration and other financial liability: $1
million primarily represents the finance expense resulting from the unwinding
of contingent consideration recognised through business combinations
6. Tax
The Group incurred a tax expense of $55 million (H1 2024: $59 million). The
reported effective tax rate for H1 2025 is 18.6% (H1 2024: 20.5%),
representing the best estimate of the average annual effective tax rate
expected for the full year on a legal entity basis, applied to the pre-tax
income for H1 2025 and adjusted for the tax effect of any discrete items
recorded in the same period.
The prior year reported effective tax rate for the Group was higher than the
same period this year primarily due to the difference in earnings mix.
The application of tax law and practice is subject to some uncertainty and
amounts are provided where the likelihood of a cash outflow is probable.
Global minimum tax
The Group is within the scope of the OECD Pillar Two model rules. Under the
legislation, the Group is liable to pay a top-up tax for the difference
between its Global Base Erosion (GloBE) effective tax rate per jurisdiction
and the 15% minimum rate.
Based on the latest assessment of the Pillar Two rules, the Group does not
expect to incur a material top up tax charge.
US Finance Act
On 4 July 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law,
introducing changes to US tax legislation. As the legislation was enacted
after the reporting period, its provisions are not reflected in the interim
tax position. The Group is currently assessing the potential impact of these
changes on future financial periods.
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
7. Dividends
H1 2025 H1 2024
$m $m
(Unaudited) (Unaudited)
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 December 2024 of 48 cents (2023: 47 106 104
cents) per share
106 104
The proposed interim dividend for H1 2025 is 36 cents (H1 2024: 32
cents) per share.
The proposed interim dividend will be paid on 18 September 2025 to eligible
shareholders on the register at the close of business on 15 August 2025 and
has not been included as a liability in these condensed consolidated interim
financial statements.
Based on the number of shares in free issue at 30 June 2025 of 221,451,926 the
total proposed interim dividend amount is $80 million.
8. Other intangible assets
Other intangible assets increased by $50 million (H1 2024: decreased by $1
million) during the period, primarily due to additions of $101 million (H1
2024: $52 million) offset by amortisation of $49 million (H1 2024: $49
million) and impairment charges of $6 million (H1 2024: $1 million).
9. Other current liabilities
30 June 31 December
2025
2024
$m $m
(Unaudited) (Audited)
Deferred income (Note 11) 41 28
Refund liability 158 151
Contingent and deferred consideration liabilities (Notes 5, 11 and 15) 30 85
Acquired contingent liability (Note 11) 17 20
Indirect rebates and other allowances 185 173
Others 18 18
449 475
Deferred income includes contract liabilities related to the Group's
obligations for contract manufacturing services, for which payment has been
received or is receivable. It also includes contract liabilities for free
goods owed to certain customers as an alternative to discounts. Additionally,
deferred income comprises deferred lease income arising from the lease
component within contract manufacturing services.
Refund liabilities relate to provisions for product returns, where the Group
allows customers to return products within a specified period prior to and
subsequent to the expiration date.
Indirect rebates and other allowances mainly represent rebates granted to
healthcare authorities and certain indirect customers under contractual
arrangements.
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
10. Financial debts
Short-term financial debts
30 June 31 December
2025
2024
$m $m
(Unaudited) (Audited)
Bank overdrafts 3 4
Import and export financing(1) 76 14
Short-term loans 3 3
Current portion of long-term loans 624 621
706 642
1. Import and export financing represents short-term financing for the
ordinary trading activities of the Group
Long-term financial debts
30 June 31 December
2025
2024
$m $m
(Unaudited) (Audited)
Long-term loans 922 729
Long-term borrowings (Eurobond) 500 499
1,422 1,228
Less: current portion of long-term loans (624) (621)
Long-term financial loans 798 607
Breakdown by maturity:
Within one year 624 621
In the second year 111 118
In the third year 107 129
In the fourth year 471 117
In the fifth year 109 242
In the sixth year - 1
1,422 1,228
The financial debts are held at amortised cost.
Major financial debts arrangements include:
a) $1,150 million syndicated revolving credit facility that matures on 04
January 2029. At 30 June 2025, the facility had an outstanding balance of $465
million (31 December 2024: $240 million) and a fair value of $465 million (31
December 2024: $240 million) and an unutilised amount of $685 million (31
December 2024: $910 million). The facility can be used for general corporate
purposes.
b) A $500 million 3.25%, five-year Eurobond with a rating of BBB (S&P
& Fitch) that matured on 9 July 2025. At 30 June 2025, the bond had a
carrying value of $500 million (31 December 2024: $499 million) and a fair
value of $499 million (31 December 2024: $493 million).
c) A $400 million five-year syndicated loan facility that matures on 13
October 2027. At 30 June 2025, the facility had an outstanding balance of $134
million (31 December 2024: $162 million) and a fair value of $134 million (31
December 2024: $162 million).
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
10. Financial debts continued
Long-term financial debts continued
a) A $200 million eight-year loan facility from the International Finance
Corporation and Managed Co-lending Portfolio program that matures on 15
September 2028. At 30 June 2025, the facility had an outstanding balance of
$168 million (31 December 2024: $185 million) and a fair value of $168 million
(31 December 2024: $185 million).
b) A $150 million ten-year loan facility from the International Finance
Corporation that matures on 15 December 2027. At 30 June 2025, the facility
had an outstanding balance of $54 million (31 December 2024: $63 million) and
a fair value of $51 million (31 December 2024: $61 million).
On 3 July 2025, the Group entered into a $250 million six-year loan facility
from the International Finance Corporation that matures on 3 July 2031. The
proceeds were used for general corporate purposes.
On 8 July 2025, the Group issued a new $500 million five-year Eurobond with a
5.125% coupon rate to refinance the previously issued $500 million five-year
Eurobond, with a 3.25% coupon rate which matured on 9 July 2025.
11. Other non-current liabilities
30 June 31 December
2025
2024
$m $m
(Unaudited) (Audited)
Contingent consideration liability (Notes 5, 9 and 15) 7 68
Acquired contingent liability (Note 9) 20 29
Deferred income (Note 9) 25 30
52 127
Contingent consideration liabilities represent contractual liabilities
arising from business combinations to make payments to third parties in the
form of milestone payments that depend on the achievement of certain
regulatory approvals; and payments based on future sales of certain products.
The current portion of these liabilities are recognised in other current
liabilities (Note 9).
The contingent consideration liability is accounted for as a financial
liability at fair value under IFRS 9 (Note 15).
Acquired contingent liability was recognised as part of a business
combination. On acquisition, the acquired contingent liability was recognised
at fair value under IFRS 3 'Business Combinations' and it is subsequently
measured at the higher of the amount that would be recognised under IAS 37
'Provisions, Contingent Liabilities and Contingent Assets' and the amount
initially recognised less any settlements made in respect of the liability.
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
12. Provisions
30 June 31 December
2025
2024
$m $m
(Unaudited) (Audited)
Provision for legal settlements 201 129
Provision for end of service indemnity 29 29
230 158
Due within one year 194 122
Due after more than one year 36 36
230 158
Provision for legal settlements is related to the expected settlement amount
for legal matters, of which $7 million is expected to be settled after more
than one year (Note 5).
Provision for end of service indemnity relates to employees of certain Group
subsidiaries and includes immaterial amounts for defined benefit plans. This
provision is calculated based on relevant laws in the countries where each
Group company operates, in addition to their own policies.
13. Cash generated from operating activities
H1 H1
2025
2024
$m $m
(Unaudited) (Unaudited)
Profit before tax 295 288
Adjustments for depreciation, amortisation and impairment charges of:
Property, plant and equipment 47 47
Intangible assets 55 50
Right-of-use of assets 5 5
Gain from investments at fair value (1) -
through profit or loss (FVTPL)
Cost of equity-settled employee share scheme 16 15
Finance income (75) (4)
Finance expense 40 68
Foreign exchange loss 8 14
Gain on termination of lease - (1)
Group's share of profit of joint venture - (1)
Changes in working capital:
Change in trade and other receivables (107) (130)
Change in other current assets (15) (19)
Change in inventories (62) (66)
Change in trade and other payables (44) (24)
Change in other current liabilities 27 3
Change in provisions 72 1
Change in other non-current liabilities (13) (13)
Change in other non-current assets (27) 1
Cash flow from operating activities 221 234
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
14. Reconciliation of movement in net debt
H1 H1
2025
2024
$m $m
(Unaudited) (Unaudited)
Interest-bearing loans and borrowings (Note 10)
Balance at 1 January 1,249 1,125
Proceeds from issue of long-term financial debts 402 211
Proceeds from issue of short-term financial debts 182 253
Repayment of long-term financial debts (214) (148)
Repayment of short-term financial debts (123) (219)
Amortisation of upfront fees 2 2
Foreign exchange translation movements 6 (1)
Balance at 30 June 1,504 1,223
Lease liabilities
Balance at 1 January 57 66
Additions 2 4
Adjustments (1) (1)
Repayment of lease liabilities (4) (16)
Balance at 30 June 54 53
Total Debt 1,558 1,276
Cash and cash equivalents (236) (236)
Net debt(1) 1,322 1,040
1. Net debt includes long and short-term financial debts and lease
liabilities, net of cash and cash equivalents and restricted cash, (if any)
15. Fair value of financial assets and liabilities
The fair value of financial assets and liabilities is included at the amount
at which the instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale.
The carrying value of the following financial assets/liabilities are not
significantly different from their fair values, as explained below:
· Cash at bank and on hand and time deposits - due to the short-term
maturities of these financial instruments and given that they generally have
negligible credit risk, management considers the carrying amounts to be not
significantly different from their fair values
· Long term receivables - carried at amortised cost, of which the fair
value is estimated not to be significantly different from the respective
carrying amounts
· Receivables and payables - the fair values of receivables and
payables are estimated to not be significantly different from the respective
carrying amounts
· Short-term loans and overdrafts approximate to their fair value
because of the short maturity of these instruments
· Long-term loans - loans with variable rates are re-priced in response
to any changes in market rates and so management considers their carrying
values to be not significantly different from their fair values
· Deferred consideration - carried at amortised cost, of which the fair
value is estimated not to be significantly different from the respective
carrying amount
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
15. Fair value of financial assets and liabilities continued
Loans with fixed rates mainly comprise:
· $500 million 3.25% five-year Eurobond with a carrying value of $500
million at 30 June 2025 and fair value of $499 million accounted for at
amortised cost. The fair value is determined with reference to a quoted price
in an active market as at the balance sheet date (a level 1 fair value)
· A ten-year $150 million loan from the International Finance
Corporation with an outstanding balance of $54 million at 30 June 2025 and a
fair value of $51 million. Fair value is estimated by discounting future cash
flows using the current rates at which similar loans would be made to
borrowers with similar credit ratings and for the same remaining maturities of
such loans (a level 2 fair value)
Management classifies items that are recognised at fair value based on the
level of the inputs used in their fair value determination as described below:
· Level 1: Quoted prices in active markets for identical assets or
liabilities
· Level 2: Inputs that are observable for the asset or liability
· Level 3: Inputs that are not based on observable market data
The following financial assets/liabilities are presented at their fair value:
Fair value measurements Level 1 Level 2 Level 3 Total
At 30 June 2025 (unaudited)
Financial Assets
Investments at FVTPL 25 - - 25
Investments in listed shares at FVTOCI 1 - - 1
Investments in unlisted shares at FVTOCI - - 42 42
Total financial assets 26 - 42 68
Financial Liabilities
Contingent consideration liability (Note 11) - - 7 7
Total financial liabilities - - 7 7
Fair value measurements Level 1 Level 2 Level 3 Total
At 31 December 2024 (audited)
Financial Assets
Investments at FVTPL 25 - - 25
Money market deposit 2 - - 2
Investments in listed shares at FVTOCI 1 - - 1
Investments in unlisted shares at FVTOCI - - 50 50
Total financial assets 28 - 50 78
Financial Liabilities
Contingent consideration liabilities (Notes 9 and 11) - - 153 153
Total financial liabilities - - 153 153
Investments at FVTPL comprise a portfolio of debt instruments that are managed
by an asset manager and which the Group designated as measured at fair value
through profit or loss. These assets are classified as level 1 as they are
based on quoted prices in active markets.
Investments at FVTOCI include investments which are not held for trading and
which the Group irrevocably designated as measured at fair value through other
comprehensive income. The total portfolio as at 30 June 2025 includes two
investments in listed companies with a readily determinable fair value that
falls under level 1 valuation, their values are measured based on quoted
prices in active markets. The other investments are unlisted shares without
readily determinable fair values that fall under level 3 valuation. The fair
value is estimated by management based on the cost of investment and adjusted
as necessary for impairment and revaluations with reference to relevant
available information and recent financing rounds.
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
15. Fair value of financial assets and liabilities continued
The following table presents the changes in Level 3 items for H1 2025, and the
year ended 31 December 2024:
Financial Financial
asset
liability
$m $m
Balance at 1 January 2024 (audited) 53 42
Settled - (13)
Remeasurement of contingent consideration and other financial liability - 71
recognised in finance expense
Unwinding of contingent consideration and other financial liability recognised - 3
in finance expense
Contingent consideration related to business combination in the period - 50
Change in fair value of investments at FVTOCI (5) -
Additions of investments at FVTOCI 2 -
Balance at 31 December 2024 and 1 January 2025 (audited) 50 153
Settled - (45)
Remeasurement of contingent consideration recognised in finance income (Note - (71)
5)
Change in fair value of investments at FVTOCI (10) -
Additions of investments at FVTOCI 2 -
Transfer out of level 3 - (30)
Balance at 30 June 2025 (unaudited) 42 7
During the period, a contingent consideration liability previously measured at
fair value and classified within level 3 of the fair value hierarchy was
transferred out of level 3 following the resolution of the underlying
contingency. The obligation is now contractually payable and classified as
deferred consideration, measured at amortised cost.
16. Related party balances and transactions
No significant transactions between the Group and its associates and other
related parties were undertaken during the half-year. Any transactions between
the Company and its subsidiaries have been eliminated on consolidation.
17. Contingent liabilities
Standby letters of credit and letters of guarantees
A contingent liability existed at the balance sheet date in respect of standby
letters of credit and letters of guarantees totalling $55 million (31 December
2024: $49 million) arising in the normal course of business. No provision for
these liabilities has been made in these financial statements.
A contingent liability existed at the balance sheet date for standby letters
of credit totalling $14 million (31 December 2024: $14 million) for potential
stamp duty obligations that may arise from the repayment of loans by
intercompany guarantors. It is not probable that the repayment will be made by
the intercompany guarantors.
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
17. Contingent liabilities continued
Legal proceedings
The Group is involved in a number of legal proceedings in the ordinary course
of its business, including litigation relating to employment matters, product
liability, commercial disputes, pricing, sales and marketing practices,
infringement of IP rights, the validity of certain patents and competition
laws.
Most of the claims involve highly complex issues. Often these issues are
subject to substantial uncertainties and, therefore, the probability of a loss
being sustained and/or an estimate of the amount of any loss is difficult to
ascertain. It is the Group's policy to provide for amounts related to these
legal matters if it is probable that a liability has been incurred and an
amount is reasonably estimable.
In the proceedings noted herein, the Group currently believes it has
meritorious defences and intends to vigorously defend itself. From time to
time, however, the Group may settle or otherwise resolve these matters on
terms and conditions that it believes to be in its best interest. Litigation
outcomes and contingencies are unpredictable and excessive verdicts can occur.
Any legal proceeding, regardless of the merits, might result in substantial
costs to defend or settle or otherwise negatively affect our business.
- In Re Generic Pharmaceuticals Pricing Antitrust Litigation. Starting
in 2016, more than 30 complaints have been filed against Group entities in the
United States on behalf of putative classes of direct and indirect purchasers
of generic drug products, as well as several individual direct action retailer
and third party payor plaintiffs. These complaints allege that more than forty
generic pharmaceutical defendants, including the Group entities, engaged in
conspiracies to fix, increase, maintain and/or stabilise the prices and market
shares of certain generic drug products during the periods of approximately
2010 to 2016. The plaintiffs seek unspecified treble monetary damages, which
can be imposed jointly and severally with other defendants and can be
significantly higher than the profits Hikma made on the alleged drug products,
and equitable injunctive relief under federal and state antitrust and consumer
protection laws. The lawsuits have been consolidated in a multidistrict
litigation (MDL) in the United States District Court for the Eastern District
of Pennsylvania (In re Generic Pharmaceuticals Pricing Antitrust Litigation,
No. 2724, (E.D. Pa.)). At this point in the proceedings, the Group does not
believe sufficient evidence exists to make a reasonable estimate of any
potential liability.
- Amarin Pharma Inc. v. Hikma Pharmaceuticals PLC. In November 2020,
Amarin Pharmaceuticals filed a patent infringement lawsuit against certain
Group entities in the United States District Court for the District of
Delaware (No. 20-cv-1630) alleging that Hikma's sales, distribution and
marketing of its generic icosapent ethyl product infringe three Amarin patents
that describe certain methods of using icosapent ethyl. Amarin sought an
injunction barring Hikma from selling its generic product as well as
unspecified damages. Hikma's product is not approved for the alleged patented
methods but rather is approved only for a different indication not covered by
any valid patents. In January 2022 the district court dismissed the lawsuit,
and Amarin appealed the court's ruling to the United States Court of Appeals
for the Federal Circuit. On 25 June 2024, the Federal Circuit reversed the
district court's decision, held that Amarin has plausibly pleaded a potential
claim for induced infringement, and remanded the case for further proceedings
at the district court. A trial is scheduled to begin on 8 September 2026.
Meanwhile, Hikma has petitioned the United States Supreme Court to review the
appeals court decision. At this point, the Group does not believe sufficient
evidence exists to make a reasonable estimate of any potential liability.
Hikma Pharmaceuticals PLC
Notes to the condensed consolidated interim financial statements continued
18. Subsequent events
On 3 July 2025, the Group entered into a $250 million six-year loan facility
from the International Finance Corporation that matures on 3 July 2031. The
proceeds were used for general corporate purposes.
On 4 July 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law,
introducing changes to US tax legislation. As the legislation was enacted
after the reporting period, its provisions are not reflected in the interim
tax position. The Group is currently assessing the potential impact of these
changes on future financial periods.
On 8 July 2025, the Group issued a new $500 million five-year Eurobond with a
5.125% coupon rate to refinance the previously issued $500 million five-year
Eurobond, with a 3.25% coupon rate which matured on 9 July 2025.
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