Pharmaniaga allocates RM295m for FY22 capex

by NUR HANANI AZMAN / pic by BERNAMA

PHARMANIAGA Bhd is allocating RM295 million for the group’s capital expenditure (capex) budget in the financial year 2022 (FY22) compared to RM106.9 million in FY21. 

Its CFO Norai’ni Mohamed Ali said the capex allocation would be largely for logistics and distribution which accounted for 61%, followed by manufacturing (36%) and Indonesia (3%). 

“For logistics and distribution, we are looking at the expansion of new warehouse, central distribution centre for the private sector, digitalisation, purchase of software for long-term medication project and migration system, and purchase and replacement of existing warehouse and office equipment. 

“For manufacturing, the group would continue to use half of the allocation to invest in halal vaccines and halal insulin projects. Not to forget our Indonesian counterpart, we are also investing in automation and digitalisation as well as upgrading various computer and lab equipment,” she told a virtual media briefing on the company’s results for the third quarter ended Sept 30, 2021 (3Q21), yesterday. 

Meanwhile, Pharmaniaga group MD Datuk Zulkarnain Md Eusope said the group would emphasise on research and development efforts which were also the key pillars of Pharmaniaga’s growth, enabling it to expand product pipeline and provide better solutions to the country. 

“This was aimed to support the Malaysian government to be pandemic ready in the future. Digitalisation and digital technologies will be the backbone of this effort,” he said. 

Zulkarnain said Pharmaniaga would continue with the Sinovac Covid-19 vaccine fill and finish manufacturing to meet domestic and international demands, as the group has the expertise, capabilities and facilities, as well as full support from technical partners from overseas. 

“Our logistics and distribution business with the Ministry of Health (MoH) will continue and currently, we are in negotiations with the government to further extend it. The signs are good for us to remain MoH’s logistics and distribution partner beyond 2024. 

“At the same time, we will embark on setting up an insulin manufacturing plant which will be located at our high-tech Pharmaniaga LifeScience Sdn Bhd’s site in Puchong, while the setting up of the world’s first halal vaccine plant is progressing on track,” he added. 

Zulkarnain said the contribution from halal insulin, which is expected to be ready in 2025, to the group’s revenue will be dependent on the requirement at that particular year. 

“We are expecting the requirement from the government during that year close to RM250 million a year, so that’s the expected revenue we are going to get for the local. We are also looking for the insulin to supply to other countries as well,” he added. 

On the Omicron variant, Zulkarnain said Sinovac is currently studying whether there is a need to change the vaccine or develop a new vaccine. 

“As far as we understand, Sinovac scientists still maintain the vaccine they are doing now. We still don’t know about the Omicron variant yet until the study comes out,” he said. 

Moving forward, he expressed optimism to remain sustainable in its business growth for the next quarter of FY21. 

Pharmaniaga’s net profit for the 3Q21 surged to RM49.84 million from RM1.44 million a year earlier, on higher revenue. 

Revenue for the quarter rose to RM2.13 billion from RM624.80 million a year ago, driven by growth across its concession, non-concession and Indonesian businesses. 

For the cumulative nine-month period, Pharmaniaga’s net profit rose 156.3% year-on-year to RM86.68 million from RM33.82 million on the back of a 96% rise in revenue to RM4.1 billion against RM2.09 billion previously. 

The non-concession business was a key driver due to sales of the Sinovac Covid-19 vaccine to the MoH as well as the private sector. 

The company has declared a third interim dividend of two sen per share with ex-date on Dec 6, 2021, entitlement date on Dec 7 and payable on Dec 29, 2021.