Pharmaniaga Q3 earnings decline on lower production

KUALA LUMPUR: Pharmaniaga Bhd reported significantly lower net profit of RM3.58mil in its third quarter compared to RM13.06mil posted in the year-ago quarter owing to the temporary closure of certain production lines in its manufacturing division.

Year to date, the manufacturing division recorded a decline in profit before tax (PBT) to RM50mil from RM73mil previously as a result of the lower production that started in Q2.

According to the healthcare group, the closures were to facilite the commercialisation of new products that were approved ahead of schedule, and it is on track to deliver new product offerings for both local and overseas markets.

For the first three quarters of 2017, the group recorded a higher revenue of RM1.7bil compared with RM1.6bil previously, while net profit fell to RM32.02mil from RM46.43mil.

The Indonesia division posted a PBT of RM3mil in the period, marking a turnaround from the deficit of RM3mil in the 2016 period. 

"This was mainly attributable to higher contributions as a result of product rationalisation exercise and lower finance costs," said the group.

Meanwhile, the logistics and distribution division delivered a higher PBT of RM5mil for the nine-month period compared with RM3mil previously due to stronger contributions from the concession business.

Earnings per share (EPS) for the third quarter stood at 1.38 sen, which brought EPS for the nine months period to 12.34 sen, lower than 17.93 sen in the previous corresponding period.

The group declared a third interim dividend of five sen per share with ex and payment dates on Nov 29 and Dec 15, 2017, respectively. 

This brings total dividends announced so far this year to 13 sen a share, which is on a par with the previous corresponding period.

In its announcement to Bursa Malaysia, Pharmaniaga lauded the Budget 2018 allocations to the healthcare sector, saying it is well-prepared to tap the opportunities they present.

"From the total allocation of RM27bil to provide quality healthcare services, RM2.5bil has been allocated for medical suppliers and RM1.6bil for consumable and medical support items. 

"Along with this, funds have been allocated for the treatment of increasing cases of rare diseases and a programme to raise awareness on non-communicable diseases," it said.

At 2.41pm, Pharmaniaga was trading two sen lower at RM3.84 with 266,800 shares done.