KUALA LUMPUR (Feb 19): Apex Healthcare Bhd fourth quarter net profit fell 16.66% to RM14 million, from RM16.8 million a year earlier, on higher administrative and tax expenses.

Earnings per share for the quarter ended Dec 31, 2019 (4QFY19) slid to 2.97 sen from 3.58 sen, the group said in a stock exchange filing.

Apex said the increase in expenses is due to the startup of a third manufacturing facility by an associate, while the tax rate normalised in the absence of a capital expenditure claim under a government reinvestment allowance programme.

The healthcare group’s quarterly revenue rose 4.64% to RM170.63 million, from RM163.06 million previously.

“Key business units performed well, with good growth in contract manufacturing, as well as pharmaceutical sales to both private and government sectors.

“Manufacturing segment (Xepa) revenue achieved its best ever quarter, in line with the Group’s priority of growing SPP NOVO capacity utilization,” Apex said.

Apex declared a final single tier dividend of two sen per share, bringing the full-year (FY19) dividend payout to 3.7 sen per share, up from 3.37 sen for FY18.

For the full-FY19, Apex’s net profit fell 9.95% to RM52.75 million, from RM58.58 million in FY18, due to higher operating and finance costs with the startup of a new Oral Solid Dosage plant, lower share of associate, and higher taxes paid.

This more than offset the 5.54% increase in full-year revenue to RM688.79 million, from RM652.66 million, the group said.

“Consistent revenue growth was achieved across key business units, with improved contributions from pharmaceutical sales to the government sector, contract manufacturing and distribution services,” the company said.

On prospects, Apex said it will continue to optimise the capacity utilization at the newly-commissioned plant, and reduce the impact of its operating costs on margins.

“The group’s associate company engaged in the contract manufacturing of orthopaedic devices has operationalized a third manufacturing facility in Penang Science Park, in order to meet future demand.

“In the short term, higher operating costs will impact profit contributions to the group,” it added.

Shares of Apex Healthcare closed unchanged at RM2.41 today, valuing the group at RM1.14 billion.