Higher operating costs weigh on Pharmaniaga Q3 earnings

  • Corporate News
  • Wednesday, 20 Nov 2019

Pharmaniaga said on Wednesday its Q3 FY19 revenue rose by 22% to RM716.85mil from RM587.66mil a year ago, mainly due to stronger demand from the concession and non-concession businesses.

KUALA LUMPUR: Pharmaniaga Bhd posted lower net profit of RM481,000 compared with RM15.05mil a year ago as it was impacted by higher operating costs.

Pharmaniaga said on Wednesday its revenue rose by 22% to RM716.85mil from RM587.66mil a year ago, mainly due to stronger demand from the concession and non-concession businesses. Earnings per share were 0.18 sen compared with 5.79 sen.

In the nine months ended Sept 30, its net profit fell by 22.7% to RM29.38mil from RM38.03mil in the previous corresponding period. Its revenue rose by 18% to RM2.10bil from RM1.78bil.

Pharmaniaga said its logistics and distribution division posted a higher profit before tax (PBT) of RM17mil compared with RM12mil a year ago.

“Despite higher operating costs, this improved performance was driven by better contributions from the non-concession business, ” it said.

Its manufacturing division recorded a PBT of RM36mil on the back of revenue of RM219.8mil in line with order trends from the government sector.

However, it was upbeat on the outlook for the division as it accelerates launches of new products, expands international market presence and increases capacity utilisation via the contract manufacturing business.

Its Indonesia division recorded a deficit of RM700,000, mainly due to higher finance costs and increased operating costs.

Managing director, Datuk Farshila Emran said the group recorded improved revenue for the January-September period due to solid contributions from both the concession and non-concession businesses.

“However, our bottom line was impacted due to reduced contribution margins.”

“In the final quarter of the year, we foresee further impact on earnings due to higher amortisation of the Pharmacy Hospital Information System.

“Nevertheless, we remain optimistic on long-term prospects, particularly given the extension by the Ministry of Health (MOH) for Pharmaniaga’s services for the provision of medicines and medical supplies to MOH facilities from Dec 1,2019 to Dec 31,2021. In addition, we will also continue to provide logistics and distribution services to MOH for a period of five years ending Dec 31,2024, ” she said.

Farshila said Pharmaniaga had a proven track record and performance and it was well-equipped to continue providing quality products and services.

“In the interim, we remain focused on strengthening our capabilities and operational efficiencies to meet the healthcare needs of both our domestic and overseas markets, ” she added.

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