Currency fluctuations in key markets caused operating profit at Hikma Pharmaceuticals to fall last year.
The London-listed company reported a 4 per cent drop, compared with a year earlier, in core operating profit to US$409 million because of fluctuations in the Algerian dinar, Moroccan dirham, Tunisian dinar, Egyptian pound and Sudanese pound against the US dollar.
Declines in the generics segment owing to increased competition were offset by the business in branded and injectables drugs.
Its gross profit decreased by 4 per cent to $818m last year, compared with $851m in 2014, while revenue declined by 3 per cent to $1.44 billion.
This year, the London-based company expects to lift the group revenue to between $2bn to $2.1bn in constant currency.
Group revenues from the injectables segment touched $710m last year, marginally down from $713m in 2014. Revenue from the branded business rose to $570m, from $551m in 2014. In the generics segment, revenue fell 40 per cent to $151m compared with 2014.
Last year, Hikma launched 92 products.
The Jordanian company has also made a series of acquisitions, starting with Bedford Laboratories of the US in 2014 for $300m, which is expected to drive growth of its injectables business by next year. It snapped up Roxane, a US generics company, in July for $1.6bn. It also acquired EIMC United Pharmaceuticals, with interests in oncology and injectables, in Egypt last year.
“The integration of the acquisition of Roxane, which closed at the end of February, will be a key focus this year,” said Said Darwazah, Hikma’s chief executive.
The US market generated $697m in group revenues, down from $763m last year. The Mena region generated $656m, up from $633m. Algeria, Egypt, the Arabian Gulf and Morocco are among its top markets.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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In 2018, the ICRC received 27,756 trace requests in the Middle East alone. The global total was 45,507.
There are 139,018 global trace requests that have not been resolved yet, 55,672 of these are in the Middle East region.
More than 540,000 individuals approached the ICRC in the Middle East asking to be reunited with missing loved ones in 2018.
The total figure for the entire world was 654,000 in 2018.