Duopharma Biotech’s 4Q19 earnings down 16.3%

By FARA AISYAH / Graphic By TMR

DUOPHARMA Biotech Bhd’s net profit declined 16.3% year-on-year (YoY) to RM12.03 million in the fourth quarter ended Dec 31, 2019 (4Q19), from RM14.37 million a year ago due to higher costs and expenses.

The group recorded RM24.32 million in distribution costs during the quarter compared to RM20.46 million posted in the same quarter the year prior, it said in an exchange filing yesterday.

Meanwhile, administration expenses increased to RM15.13 million (RM11.1 million in 4Q18) and other operating expenses rose to RM447,000 (RM39,000 in 4Q18).

The group’s earnings per share for October to December 2019 decreased to 1.76 sen from 2.17 sen in the corresponding quarter of the preceding year.

Revenue for the quarter, however, increased 19.1% YoY to RM137.76 million from RM115.63 million in 4Q18.

For the financial year ended Dec 31, 2019 (FY19), the pharmaceutical company’s earnings rose 16% YoY to RM55.27 million compared to RM47.64 million in the previous year mainly due to higher sales and lower provision of inventories.

Full-year revenue climbed 15.6% YoY to RM576.46 million from RM498.72 million in FY18, mainly as a result of higher demand from both the private and public health sectors.

The group is expected to achieve a satisfactory set of results in FY20, Duopharma Biotech group MD Leonard Ariff Abdul Shatar said.

Further, the period of the company’s contract for the supply of pharmaceutical and/or non-pharmaceutical products to hospitals, clinics and others under the government has been extended for 25 months, commencing Dec 1, 2019, until Dec 31, 2021.

“The extension augurs well for the group as it stabilises a significant portion of the group’s revenue for the said period.

“What’s more, it enables the group to mobilise our resources to intensify our foray into specialty products as one of our strategies moving forward to create a pool of niche products,” Leonard said in a statement yesterday.

He believes the Malaysian economic outlook is expected to remain resilient with domestic demand anchoring growth, despite the prolonged trade dispute between major economies, geopolitical tensions, and volatility in the global financial and commodity markets.

However, the ongoing Covid-19 outbreak may result in disruption to the global supply chain and create uncertainties in the market that could dampen the global economic outlook.

Duopharma Biotech has recommended a final dividend of five sen per share, to be approved by its shareholders at the group’s forthcoming AGM.

The counter closed two sen or 1.23% higher at RM1.64 yesterday, with a market capitalisation of RM1.12 billion.