GOVERNMENT-linked pharmaceutical company Pharmaniaga Bhd has been issued the Practice Note 17 (PN17) after it was labelled financially distressed on Bursa Malaysia.

Its directors said the PN17 was triggered in the company’s audited consolidated financial statements for the period until December 31, 2022.

The company last year struggled to sell Sinovac Covid-19 vaccines worth RM552.3 million and wrote down an Indonesian unit of RM50.3 million. 

Pharmaniaga’s parent is Boustead Holdings Bhd, which in turn is controlled by the Armed Forces Fund Board. 

A large impairment could impact Boustead Holdings.

Earlier today, Pharmaniaga announced its largest-ever quarterly net loss of RM664.39 million, or 49.19 sen per share, in the fourth quarter ended December 31, 2022.

It also said it wrote down as goodwill Indonesian manufacturing cash-generating units of RM50.3 million.

It however said its quarterly revenue grew 21.2% to RM862.72 million from RM711.72 million due to healthy growth across the group’s concession, non-concession, and Indonesian businesses.

This was attributed to strong demand from customers following the resumption of normal business activities after the Covid-19 pandemic.

It said it is undertaking aggressive selling efforts of its Covid-19 vaccine stock as the jabs have not expired.

It said it is working on a regularisation plan within a stipulated period, in accordance with Bursa Malaysia’s requirement.

“The plan will focus on strengthening the group’s financial standing, as well as assuring core business activities remain viable with growth prospects.

“The group guarantees its operational activities for concession business with the Health Ministry and non-concession business with the private sector will not be disrupted and will remain intact.

“The group is committed to service all financial obligations to lenders and other financial institutions, as well as formulating an optimal cash flow plan,” it said in a statement.

Last week, Pharmaniaga appointed Izaddeen Daud as its new non-independent non-executive chairman.

He has served on the board of Pharmaniaga as a non-independent non-executive director since March 2021. Izaddeen, who is also Boustead Holdings’ group chief executive officer (CEO), has held several roles within Boustead Group.

He is deputy group managing director, executive director for group business development, and acting CEO of Boustead Properties Bhd.

He also sits on the boards of Boustead Plantations Bhd and Boustead Heavy Industries Corp Bhd.

The company announced the resignation of Zulkarnain Md Eusope and Zulkifli Jafar from the board.

Zulkarnain has been redesignated as Pharmaniaga’s CEO, and Zulkifli its deputy CEO. – February 27, 2023.