KUALA LUMPUR, Feb 28 — Pharmaniaga Bhd shares fell 43 per cent after the company’s RM552.3 million provision for “slow-moving inventories of Covid-19 vaccines” dragged it into the Practice Note 17 (PN17), or financially distressed, category.
At 10am, the counter shaved 19 sen to 25 sen compared to its closing price of 44 sen on Monday, with 26.74 million shares changing hands. It opened at 22 sen, a drop of 50 per cent.
Yesterday, Pharmaniaga reported a net loss of RM607.32 million for the financial year ended Dec 31, 2022 (FY2022) against a net profit of RM172.15 million in the previous year.
Revenue shrank 27.1 per cent to RM3.51 billion from RM4.82 billion due to lower demand from the government for the purchase of Covid-19 vaccines.
In consideration of the below-than-expected FY2022 results, MIDF Research said it had revised its earnings estimates for the company for FY2023 and FY2024 downwards by 79 per cent and 87 per cent, respectively.
Concurrently, it also slashed the target price for Pharmaniaga shares to 48 sen from 77 sen previously.
‘‘All in all, we downgrade our recommendation from ‘buy’ to ‘neutral’. Nevertheless, we maintain a positive view of the group on the basis of its large portfolio of pharmaceutical products in line with growing demand, halal market penetration, and long-term marketing plan for international sales,’’ it said in a note.
Meanwhile, Hong Leong Investment Bank cut its FY2023 and FY2024 earnings forecasts by 51 per cent as it raised the operating expense and finance cost assumption on Pharmaniaga while downgrading the counter to a “sell.”
However, it noted that there could potentially be a reversal in the impairment provision should Pharmaniaga be able to sell more of its existing Covid-19 stockpile.
Currently, the group is engaging with various parties, including the Islamic Development Bank and the Ministry of Health, to sell its stockpile. — Bernama
