KUALA LUMPUR: Duopharma Biotech Bhd net profit for the third quarter ended September 30, 2023 (3Q23) almost halved to RM8.97 million from RM16.34 million a year ago, on increased operational cost.
The company said the increased costs were due to upward adjustment in electricity tariff; elevated labour cost pursuant to amendments to the Employment Act 1955; higher finance costs due higher overnight policy rate (OPR); incremental costs associated with the commencement of production in the new K3 facility, and unfavourable exchange rates.
Quarterly revenue was also down to RM169.24 million from RM177.07 million previously.
Earnings per share slipped to 0.93 sen from 1.72 sen previously, the company said in a filing to Bursa Malaysia today. For the nine-month period, Duopharma's net profit was RM44.14 million compared with RM52.95 million from a year ago, while revenue was RM537.23 million from RM544.76 million previously.
Commenting on the results, managing director Leonard Ariff Abdul Shatar said the company's gradual revenue recovery augurs well in the longer term, as it continues to strengthen its portfolio with high-value innovative offerings and niche products, with a focus on the ethical and consumer healthcare segments, while weathering persistent industry-wide challenges.
"We are also heartened by the government's commitment to healthcare funding, with a record allocation of RM41.2 billion in Budget 2024. "The 13.5 per cent increase in funding will undoubtedly enable essential reforms in the healthcare system, thus stimulating demand growth for pharmaceutical supplies," he said in a separate statement.
Duopharma currently holds a three-year contract worth RM375 million to supply Insugen-Insulin Recombinant Human Formulations to the Ministry of Health's facilities from April 29, 2022 to April 28, 2025.
Meanwhile, the company's contract to supply pharmaceutical and/or non-pharmaceutical products to government healthcare facilities under APPL 2017-2019 that expired on June 30, 2023 has been further extended for another six months to December 31, 2023.
In the third quarter, the company also established an Islamic medium term notes programme for the issuance of Islamic medium term notes (Sukuk Wakalah) of up to RM2.0 billion in nominal value based on the Shariah principle of Wakalah Bi Al-Istithmar (Sukuk Wakalah Programme) for a 30-year programme tenure.
Following this, the first issuance under the Sukuk Wakalah Programme amounting to RM364.0 million was made on September 29, 2023.