Pharmaniaga says no longer burdened by PhIS after Q4 losses

KUALA LUMPUR: Drugmaker Pharmaniaga Bhd said revenue increased 20% in the last quarter on improved demand, but a huge one-time hit on expenses incurred for the Pharmacy Information System (PhIS) resulted in heavy losses for the company.

The company registered a net loss of RM178mil in the December quarter that dragged its full year earnings down to RM42.5mil.

"This loss recorded for the quarter under review is a direct impact of Pharmaniaga fulfilling the contractual obligations of the PhIS under the concession agreement by the Government," it said in a statement today.

Following the new contract arrangement with the Health Ministry, the remaining unamortised PhIS costs were fully recognised in the quarter under review.

In addition, there was also provision for stock write off on the voluntary Ranitidine product recall of RM9mil.

This saw the Group recording a loss before zakat and taxation of RM238mil for the fourth quarter.

Revenue in the fourth quarter was RM2.8bil, while EBITDA came in at RM131mil.

“It was a challenging quarter as the Group was significantly impacted by the recognition of the remaining unamortised PhIS, a non-cash item worth RM247mil." managing director Datuk Farshila Emran said in the statement.

She noted that the group’s financial performance would not be burdened by the PhIS amortisation moving forward.

“The fact that we continued to register solid growth in revenue is indeed encouraging and bodes well for the Group’s prospects," she said.

In the short-term, the ongoing coronavirus outbreak remains at the forefront as the healthcare sector strives to contain the disease.”

From a long-term perspective, Farshila said the outlook is positive for Pharmaniaga.

"The new contract secured with MOH for the provision of medicines and medical supplies to MOH facilities from Dec 1, 2019 to Dec 31, 2021 as well as logistics and distribution services to MOH for five years ending Dec 31, 2024 are set to be key contributors to the Group’s earnings,” she said.