Pharmaniaga 2Q net profit dips 5.6% to RM13.92m

KUALA LUMPUR: PHARMANIAGA BHD [] net profit for the second quarter ended June 30, 2011 dipped 5.6% to RM13.92 million from RM14.75 million a year earlier, due mainly to lower gross profit margins and amortisation of its new plant that started production during the quarter.

Revenue for the quarter rose to RM396.44 million from RM350.34 million in 2010. Earnings per share was 13.01 sen, while net assets per share was RM4.22.

For the six months ended June 30, Pharmaniaga’s net profit rose to RM29.4 million from RM24.05 million on the back of revenue RM781.76 million.

In a statement Wednesday, Aug 10, Pharmaniaga chairman Tan Sri Lodin Wok Kamaruddin said the new management team had delivered an improved profit after tax on a significantly stronger turnover.

“This demonstrates that our initiatives in fulfilling customer needs are bearing fruit,” he said.

Pharmaniaga also inked separate memorandums of understanding (MOUs) to acquire a 51% equity interest in Idaman Pharma Manufacturing Sdn Bhd (IPMSB) from Boustead Idaman Sdn Bhd and a 49% equity interest in IPMSB from Idaman Pharma Sdn Bhd (IPSB).

It will acquire the stakes for RM51 million and RM49 million cash, respectively.

Upon completion of this corporate exercise, IPMSB shall be a wholly owned subsidiary of Pharmaniaga and will continue its business of manufacturing and distribution of pharmaceutical products.

The acquisition will be funded via borrowings and internally generated funds.

Lodin said the corporate exercise would give it a stronger footing in the pharmaceutical industry as it anticipates synergistic benefits from the operations of IPMSB and Pharmaniaga collectively.

“We also stand to benefit from cost improvements as a result of streamlining and optimising manufacturing facilities, production capacities as well as the cross fertilisation and sharing of best practices between IPMSB and Pharmaniaga.

“The successful completion of this corporate exercise should have a beneficial impact on the group’s bottom line, not only from the acquisition of new contracts but also from streamlining of operations,” he said.