KUALA LUMPUR (Feb 22): Duopharma Biotech Bhd posted a 35% increase in its net profit to RM16.19 million for the fourth quarter (4QFY20) ended Dec 31, 2020, from RM12.03 million a year ago.

Quarterly revenue contracted 2.7% to RM134.09 million, from RM137.76 million a year earlier.

The group proposed a second interim dividend of six sen per share for the financial year ended Dec 31, 2020 (FY20), bringing total dividends per share for the period to 6.5 sen per share. 

During the quarter, Duopharma saw lower cost of sales year-on-year which propped up its net profit, as well as lower distribution costs, administration expenses and other operating expenses, according to its financial statements. 

For FY20 ended Dec 30, its cumulative net profit increased 6% to RM58.6 million from RM55.27 million the same period a year earlier, while revenue fell 1.1% to RM569.9 million from RM576.46 million.

The group attributed the marginal decline in revenue to lower demand from the private ethical sector and public health sector, although this was partly offset by higher demand from the consumer healthcare sector. 

The improvement in profit followed the group’s initiatives and measures in managing operational costs.

Going forward, the group said it expects to achieve “satisfactory results” for the financial year ending Dec 31, 2021, amid the extension of its government contracts, which includes contracts for the supply and delivery of human insulin products, as well as for the supply of pharmaceutical and non-pharmaceutical products.

“The extensions augur well for the group, as it stabilises a significant portion of the group’s revenue for the said period and enables the group to mobilise its resources to intensify its foray into specialty products, which is one of its strategies moving forward,” it said.

It also pointed out that it had entered into a term sheet agreement with the Ministry of Health to supply 6.4 million doses of the Sputnik V Covid-19 vaccine, which is developed by the Gamaleya National Research Institute of Epidemiology and Microbiology.

Duopharma has inked an agreement with the Russian Direct Investment Fund (RDIF) to secure 6.4 million doses of the vaccine. 

“The supply is subject to the execution of the definitive supply agreements between RDIF and Duopharma and between MoH and Duopharma, as well as the approval of vaccine by the Drug Control Authority, Malaysia (DCA).

“Should the definitive supply agreements be successfully executed and the vaccine approved by the DCA, the supply of vaccine is expected to contribute positively to the future earnings of Duopharma Biotech Group for the financial year ending Dec 31, 2021,” said the group.

Duopharma fell six sen or 1.7% to RM3.42 today, giving it a market capitalisation of RM2.41 billion.