Hikma Pharmaceuticals Plc
- 4022 Words
- 17 Pages
- Report
Ratio Analysis of Hikma Pharmaceuticals PLC
Ratio Analysis of Hikma Pharmaceuticals PLC
PART A
Introduction
Hikma Pharmaceuticals develops, manufactures and markets of a range of generic and in-licensed pharmaceutical products in solid, semi-solid, liquid and injectable final dosage forms. Co.'s operations are conducted through three business segments: Branded Pharmaceuticals, Generic Pharmaceuticals and Injectable Pharmaceuticals.
Hikma Pharmaceuticals is a multinational pharmaceutical company based in London, that manufactures branded and non-branded generic and in-licensed pharmaceutical products. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. The Company was founded by Samih Darwazah in 1978 in Amman in Jordan. In August 1996 it became the first Arab company to export pharmaceutical products to the United States. It was first listed on the London Stock Exchange in 2005. Recent acquisitions include Instituto Biochimico Pavese Pharma in Italy in 2005 and Jazeera Pharmaceutical Industries in Saudi Arabia in 2006. In 2007 the Company went on to buy APM in Jordan, Alkan Pharma in Egypt, Thymoorgan in Germany[1] and Ribosepharm in Germany.
Branded products include Actos, Amoclan, Ciprolon, Prograf and Votrex. Generic products include Amoxicillin, Cefaclor, Doxycycline, Lisinopril and Lithium Carbonate. Injectable products include Cefizox, Cefuroxime, Ciprolon, Samixon and Vancomycin. The majority of Co.'s operations are in the Middle East and North Africa region, the United States and Europe.
Table of Absolutes & Ratio Analysis
Total Revenue
580,656,000
EBITDA
81,346,000
Operating Income
80,682,000
Net Income
57,125,000
Total Assets
966,459,000
Current Assets
415,206,000
Total Liabilities
357,464,000
Current Liabilities
228,434,000
Long Term Debt
115,910,000
Stockholders' Equity
608,995,000
Hikma Pharmaceuticals Plc
Profitability Ratios
12/31/2008
12/31/2007
12/31/2006
ROA % (Net)
6.13
9.06
12.3
ROE % (Net)
11.02
16.16
17.11
ROI % (Operating)
10
15.63
19.61
EBITDA Margin %
14.01
21.06
23.85
Calculated Tax Rate %
10.8
23.39
25.98
Liquidity Indicators
12/31/2008
12/31/2007
12/31/2006
Quick Ratio
1.07
0.53
1.89
Current Ratio
1.82
0.96
2.81
Net Current Assets % TA
19.33
-1.79
39.54
Debt Management
12/31/2008
12/31/2007
12/31/2006
LT Debt to Equity
0.19
0.15
0.09
Total Debt to Equity
0.38
0.8
0.19
Interest Coverage
4.89
10.62
9.71
Asset Management
12/31/2008
12/31/2007
12/31/2006
Total Asset Turnover
0.62
0.65
0.72
Receivables Turnover
3.22
3.06
3.29
Inventory Turnover
3.83
3.88
4.47
Accounts Payable Turnover
12.62
11.02
10.73
Property Plant & Equip Turnover
2.25
2.24
2.56
Cash & Equivalents Turnover
12.64
7.8
2.85
Per Share
12/31/2008
12/31/2007
12/31/2006
Cash Flow per Share
0.4
0.27
0.21
Analysis
The gross profit has reduced slightly because the Hikma Pharmaceuticals offered majority of its products at cheaper rate to promote its operations. With operations revenue increasing because of this marketing strategy, the ratio is bound to be lower. However the gross profit has also shown an increase due to the increased operations which is understandable as they have a direct relationship. But the increase in revenue is more than the increase in gross profit thus shifting the balance towards the denominator.
When analyzed also with net profit, net profit has also shown a decline. Net profit has marginally decreased over the year. This marginal difference could be attributed to an increase in administrative expenses, increased taxes due to new taxation policy guidelines and finance costs (Interest paid). Similar to gross profit, the increase in revenue surpasses the increase in net profits and hence the ratio has shown a decline. However it can be presumed that the new operations strategy would help in not only increase the operations in the future but also improve profits by a good margin.
The Hikma Pharmaceuticals has improved its efficiency in utilizing the shareholder funds when compared to previous years. This increase is warranted and expected because of the increase in profits arising due to increased operations, thanks to the new pricing ...