Pharmaniaga’s 2Q net profit slumps 95% on lower sales


PHARMANIAGA Bhd’s net profit for the second quarter ended June 30, 2022 (2Q22), plunged 94.73% to RM722,000 from RM13.7 million a year ago, dragged by lower sales for its non-concession segment, due to the timing of orders from the Ministry of Health (MoH) for products under the tender business.

In a filing to Bursa Malaysia today, the pharmaceutical group said there was also lower revenue in other segments including Indonesian businesses as a result of the festive season during the quarter.

Meanwhile, the group’s revenue fell 35.34% to RM761.1 million from RM1.18 billion in 2Q21.

The group also registered lower earnings per share of six sen for the period against 1.05 sen previously.

Pharmaniaga declared a second interim dividend of half a sen per share to be paid on Oct 4, 2022.

For the cumulative six months ended June 30, 2022 (6M22), Pharmaniaga said its net profit fell 22.74% to RM28.46 million from RM36.84 million a year ago, while revenue fell 12.69% to RM1.72 billion from RM1.97 billion.

On a segmental basis, Pharmaniaga said its logistics and distribution division recorded a higher Ebitda of RM42.4 million for 6M22 compared to RM40 million in the previous year’s corresponding period.

The group said this was mainly attributable to stronger contributions from the concession business as additional products were added to the concession list coupled with higher demand for in-house products from the MoH.

Its manufacturing division recorded a profit before tax of RM17.7 million on the back of RM134 million in revenue for the financial period under review.

“With the continued expansion of the group’s new product portfolio coupled with sustained demand, the group’s long-term prospects for its manufacturing division remain optimistic.

“Going forward, the group will continue to actively enhance the division’s operational efficiency and will build on its growing portfolio of products to broaden its global presence, as well as leverage its increased capacity utilisation via its contract manufacturing business,” it said.

Meanwhile, Pharmaniaga’s Indonesia division registered a profit before tax of RM3.6 million for the financial period under review, a significant improvement compared to the loss before zakat and taxation of RM0.3 million in the corresponding period last year.

The group noted that this was primarily due to its operational efficiency through digitalisation and aggressive sales efforts.

On prospects, Pharmaniaga said the group’s business in Indonesia continued to post an encouraging performance, leveraging the improved operational efficiency through digitalisation and aggressive sales efforts.

It added that this is a sustainable exercise, with the aim of capitalising on the 280 million population of the country.

On the local front, the group said it is focusing on leveraging its business portfolio in the private market, especially for over-the-counter and ethical products to pharmacies, hospitals and clinics across the country, while concentrating on the extension of its logistics and distribution agreement with the MoH, targeted to be executed in 4Q22.

It noted that recent shortages of drugs resulted in the government’s approval for the release of its medicine stockpile to the private sector, with the group being tasked with managing the release of the medicine.

“This resulted in the surge for the demand of its generic pharmaceutical products four-fold. The group expects the medicine shortage to normalise by 4Q22,” it said.

Moving forward, Pharmaniaga said the group is cautious taking into consideration various market uncertainties impacting the global economy such as the rise in raw material prices and increased interest rates.

At the time of writing, Pharmaniaga’s share price fell five sen or 6.92% to 60 sen, giving it a market capitalisation of RM792.52 million.