KUALA LUMPUR, Feb 28 — Pharmaniaga Bhd has posted a net loss of RM607.32 million for the financial year ended December 31, 2022 (FY2022) against a net profit of RM172.15 million in the previous year, with a RM552 million provision for "slow-moving stocks of Covid-19 vaccines” pushing the company under the financially troubled PN17 category.

Revenue tumbled 27.1 per cent to RM3.51 billion from RM4.82 billion as there was lower demand from the government for the purchase of Covid-19 vaccines.

"However, the group achieved encouraging growth in the concession business as additional products were added to the concession list which took effect from the second half of 2021.

"In addition, there was also an improved contribution from the private sector by approximately 50 per cent as a result of aggressive sales efforts coupled with new products launched to the market during the year,” it said in a filing with Bursa Malaysia yesterday.

In terms of the local market prospects, the pharmaceutical company said the government has extended the date for negotiations of the group’s concession agreement to June 2023.

It said the business would continue to operate as usual during the final stages of negotiations.

The company said that it had also registered an encouraging 50 per cent year-on-year growth in the private market and would target to maintain the growth in 2023.

In a separate statement, the company said that due to the accounting treatment pursuant to Malaysia Financial Reporting Standards requirements and Pharmaniaga’s good governance practice, the group had to provide for an amount of RM552.3 million on the stock of vaccines.

It said that this provision inevitably triggered the criteria of Practice Note 17 (PN17) for Pharmaniaga.

"Pharmaniaga experienced a challenging FY2022 attributed mainly to the provision of the slow — moving stocks of Covid-19 vaccines with shelf life in its inventory.

"This resulted in loss before taxation and zakat and loss after taxation and zakat of RM580.8 million and RM605 million respectively,” it said.

Addressing the matter at hand, the group said that it is currently in talks with various parties, both local and overseas to purchase the vaccines and is optimistic about favourable outcomes from the negotiations.

"Notwithstanding this issue, the group assures all parties that it is committed to working on a regularisation plan in accordance with Bursa Malaysia’s requirement within the stipulated time.

"The plan would focus on strengthening the group’s financial standing, as well as assuring that core business activities remain viable with growth prospects,” it said.

The company said that its operational activities for both concession business with the Health Ministry and non-concession business with the private sector would not be disrupted and continue to be intact.

"The group is committed to servicing all financial obligations to lenders and other financial institutions, as well as formulating an optimal cash flow plan,” it added. — Bernama