PETALING JAYA (April 6): Pharmaniaga Bhd expects a slight growth in earnings for the financial year ending Dec 31, 2017 (FY17), supported by growth in existing businesses and cost containment measures.

Speaking at a press conference after the annual general meeting today, Pharmaniaga chief financial officer Norai'ni Mohamed Ali said the rise in earnings will be from organic growth from government's concession, private and overseas business, as well as the implementation of cost containment measures.

"The group has also implemented various cost optimisation programmes for manufacturing and logistics operations, coupled with cost containment measures," she said.

"In view of the lower government orders, we are implementing aggressive stock optimisation process, a major chunk of our costs," she explained.

Pharmaniaga's FY16 net profit fell 45.7% year-on-year to RM45.6 million on higher operating costs and finance costs. Its revenue was flat at RM2.19 billion.

Borrowings of the group grew to RM616.9 million in FY16 from RM400.2 million a year ago. Finance cost of FY16 jumped to RM33.7 million from RM15.15 million.

Meanwhile, Pharmaniaga managing director Datuk Farshila Emran said the group is expected to secure 40% of the RM3 billion government allocated budget for pharmaceutical products this year.

The orders will come in a staggered manner, she said.

Farshila said Pharmaniaga will also be launching 17 new products this year.

Meanwhile, she said RM60 million will be allocated as capital expenditure for FY17, mainly for the upgrade of machineries for its manufacturing facilities.

The capex will be funded internally and through borrowings.

At the midday break, Pharmaniaga gained 0.21% or 1 sen to RM4.85 with 4,300 shares traded.