KUALA LUMPUR (March 28): Pharmaniaga Bhd has appointed MIDF Amanah Investment Bank Bhd (MIDF Amanah IB) as the principal adviser for its proposed regularisation plan.

The pharmaceutical group fell into Practice Note 17 (PN17) status a month ago after triggering Paragraph 2.1(a) of PN17 in its unaudited consolidated financial statements for the fourth quarter ended Dec 31, 2022 (4QFY2022) due to negative shareholder equity, and is required to submit a regularisation plan to the Securities Commission Malaysia or Bursa Malaysia Securities Bhd within 12 months from Feb 27.

The negative shareholder equity was a result of a hefty RM552.3 million impairment of Covid-19 vaccines, which dragged Pharmaniaga to its largest ever quarterly and full-year net losses.

On Feb 27, the group announced that it recorded a net loss of RM664.39 million for 4QFY2022, from a net profit of RM85.48 million a year earlier. This translates to a loss per share of 49.19 sen, versus an earnings per share of 6.53 sen previously.

This was despite a 21.22% rise in quarterly revenue to RM862.72 million from RM711.72 million previously, due to “healthy growth” across the group’s concession, non-concession and Indonesian business, as a result of strong demand subsequent to the resumption of normal business activities post-Covid-19 pandemic.

For the full financial year, the group posted a net loss of RM607.32 million, as compared to a net profit of RM172.15 million for FY2021, with revenue contracting 27.09% to RM3.51 billion from RM4.82 billion.

Aside from the significant losses, Pharmaniaga’s short-term borrowings swelled to RM968.27 million as at Dec 31, 2022, from RM570.06 million a year ago, while its long-term borrowings declined to RM190.63 million from RM285.17 million.

Meanwhile, the integrated pharmaceutical firm’s receivables rose to RM351.66 million as at end-2022, from RM297.75 million a year ago. Its cash balance was at RM52.85 million, while its inventory dropped to RM767.26 million from RM1.26 billion a year ago, after the impairment.

The impact of the vaccine impairment stoked fear in the market the day following its quarterly result announcement, with Pharmaniaga shares posting a single-day loss of 38.64% or 17 sen to close at 27 sen on Feb 28.

After falling to a near three-year low of 25 sen on March 2, the counter began recouping losses. On Tuesday (March 28), Pharmaniaga ended half a sen or 1.75% higher at 29 sen, giving the group a market capitalisation of RM379.96 million.

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