The pharmaceutical player still expects to deliver a “satisfactory performance” in the financial year 2023.
PETALING JAYA: Duopharma Biotech Bhd
, whose net profit almost halved in the third quarter ended Sept 30, 2023 (3Q23), cautioned that its manufacturing margins are pressured by operating challenges.
These include high electricity tariffs, increased labour costs, fluctuations in the US dollar, temporary shutdown of its small volume injectable plant for maintenance and upgrades as well as incremental costs associated with the commencement of production at its new K3 facility.
Nevertheless, the pharmaceutical player still expects to deliver a “satisfactory performance” in the financial year 2023 (FY23).
The group, which is 44.1% owned by Permodalan Nasional Bhd, reported a net profit of RM8.97mil in 3Q23, down by 45.13% year-on-year (y-o-y) amid a drop in local sales, particularly in the consumer healthcare segment.
Revenue was down by 4.43% y-o-y to RM169.24mil.
Earnings per share for the quarter under review were 0.93 sen. No dividend was declared for the quarter.
Cumulatively, for the first nine months of FY23, the group’s net profit fell by 16.63% y-o-y to RM44.14mil.
Meanwhile, revenue was lower by 1.38% y-o-y at RM537.23mil.
The group was negatively affected by a decrease in demand from the consumer healthcare sector and the prolonged impact of increased operational costs.
In addition, a one-off loss arising from the mutual termination of an agreement to sub-lease a vacant parcel of land also weighed down the bottom line.
Duopharma managing director Leonard Ariff Abdul Shatar said the group will continue to strengthen its portfolio with high-value innovative offerings and niche products, with a focus on the ethical and consumer healthcare segments.
He added that the group will continue weathering persistent industry-wide challenges.
“We are also heartened by the government’s commitment to healthcare funding, with a record allocation of RM41.2bil in Budget 2024.
“The 13.5% increase in funding will undoubtedly enable essential reforms in the healthcare system, thus stimulating demand growth for pharmaceutical supplies,” he said in a statement.
Duopharma’s shares shed two sen yesterday to close at RM1.22.
The group currently holds a three-year contract worth RM375mil to supply Insugen-Insulin Recombinant Human Formulations to the Health Ministry’s facilities from April 29, 2022 to April 28, 2025.
Meanwhile, the group’s contract to supply pharmaceutical and/or non-pharmaceutical products to government healthcare facilities that expired on June 30, 2023, has been further extended for another six months to Dec 31, 2023.
During the quarter in review, the group established an Islamic medium-term notes programme for the issuance of Islamic medium-term notes of up to RM2bil in nominal value based on the syariah principle of Wakalah Bi Al-Istithmar (sukuk wakalah programme) for a 30-year programme tenure.
