by RAHIMI YUNUS / graphic by MZUKRI MOHAMAD
HIGHER demand for Duopharma Biotech Bhd’s pharmaceutical products particularly in consumer healthcare was offset by lower demand from the private ethical sector.
The company’s net profit in the third quarter ended Sept 30, 2020 (3Q20), decreased 4.9% year-on-year (YoY) to RM14.1 million from RM14.9 million in the corresponding period last year, according to an exchange filing yesterday.
Revenue contracted by 6.4% YoY in 3Q20 to RM133.8 million due to lower demand from the private ethical sector, although demand from the consumer healthcare sector was higher.
“Even with the ongoing scenario comprising global and domestic upheavals largely attributed to the Covid-19 pandemic, these solid financial results attest to higher demand for the group’s pharmaceutical products especially from the consumer healthcare sector, which helped offset a marginally lower revenue compared to the corresponding period last year, attributed to lower demand from the private ethical sector.
“While 2020 has undoubtedly been more challenging than previous years, we remain cautiously optimistic of our financial year 2020 performance,” group MD Leonard Ariff Abdul Shatar said in a statement yesterday.
In the bourse filing yesterday, Duopharma stated that the global economic outlook has dampened, made worse by weakened oil prices, which have put pressure on the ringgit and are detrimental to importers like Duopharma.
The company further said the weakening of the ringgit will put pressure on its manufacturing margin and hence, profit thereof.
Leonard Ariff said an additional allocation for the healthcare sector in Budget 2021 augurs well for the group as 50% of its sales are made to the public health sector.
“The government’s Budget 2021 incentives will encourage Malaysia’s recovery from what has been a tumultuous year. The inclusion of public health initiatives, such as the provisioning for the purchase of a Covid-19 vaccine and increased allowances for health checks and treatments will help to safeguard the rakyat’s health into the coming year,” he added.
As it is, Duopharma’s new highly potent active pharmaceutical ingredients plant is already in operational mode, especially with the manufacture and supply of cancer drug Letrozole for both the public and private sectors.
Additionally, Duopharma said it had been informed the contract period 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.
“This extension will help stabilise a significant portion of the group’s revenue for the said period. We also hope that the insulin off-take will also be extended to enable the group to mobilise our resources to intensify our foray into specialty products as one of our strategies moving forward is to create a pool of niche products,” Leonard Ariff said.