In a statement today, the pharmaceutical group assured shareholders of its “strong and steady progress”, backed by resilient business fundamentals and well-defined strategies to exit its Practice Note 17 status (PN17).
Executive director Zulkifli Jafar pointed to the detailed roadmap to financial recovery published via its requisite announcement in November 2023, and the submission of its regularisation plan to Bursa Malaysia Securities in February this year.
In its report on March 29, 2024, the independent auditor PricewaterhouseCoopers (PwC) indicated the group and company incurred net losses of RM78.7 million and RM63.3 million, respectively, in FY2023.
As at Dec 31, 2023, the group and company’s current liabilities exceeded their current assets by RM895 million and RM439 million, respectively, and recorded a capital deficiency of RM274.1 million.
A massive impairment caused by its failure to offload RM552.3 million worth of Covid-19 vaccines sent Pharmaniaga tumbling into PN17 status on Feb 27, 2023. The impairment led to its largest ever quarterly net loss of RM664.39 million for Q4 FY2022.
Zulkifli said the regularisation plan, which Bursa has yet to approve, outlines a holistic strategy to increase the group’s equity and minimise its accumulated losses.
This includes capital reduction of approximately RM180 million issued share capital, fundraising of RM354.6 million via rights issuance for shareholders to strengthen their investments, and RM300 million in private placement for potential investors to participate in the group’s growth plans.
“These efforts will propel Pharmaniaga towards rejuvenating its financial standing and successfully exit the PN17 status according to the schedule.
“We have the capabilities and resources to overcome the challenges and achieve the targets, especially when the group has the unwavering support from our substantial shareholders, the Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd (BHB),” he added.
Pharmaniaga also streamlined its business operations by ceasing non-core and underperforming businesses, improving operational efficiency and cost optimisation, and increasing profit margin by focusing on high value products and services.
Zulkifli said the financial situation has not affected the group’s operational efficiency, particularly its subsidiary Pharmaniaga Logistics Sdn Bhd which holds the logistics and distribution concession with the ministry of health (MoH).
“We have consistently excelled in meeting the MoH’s service standards, achieving scores of 98.75% for 2023 and 99.26% for the first quarter of this year,” he said.
Pharmaniaga is the pharmaceutical arm of BHB, and together with LTAT, are the substantial shareholders of the company.