PETALING JAYA: Pharmaniaga Bhd has embarked on an extensive restructuring exercise that includes implementing rigorous fiscal discipline initiatives across its operations as part of the group’s comprehensive recovery plan.

Acknowledging the need to revamp the group’s business strategy, Pharmaniaga chairman Izaddeen Daud said, “Integral to this effort are our measures to clean up the books, strengthen the governance and internal processes to ensure transparency in all our business activities.”

He added that the group is undertaking a comprehensive review of its position in all business segments, affirming every challenge is being met head-on and addressed holistically which includes restructuring non-performing business units, streamlining business activities, as well as optimisation of manpower and asset utilisation.

“These initiatives may lead to adverse one-off financial impact in the upcoming quarters. It will be a challenging and bumpy period for the group, but this strategic move will uphold our business integrity and foster a more agile, efficient, and sustainable operational model. The ultimate goal is to present a transparent, realistic, and detailed recovery plan for the group, which will set a clear path for restoring its profitability, maintaining its position in the industry, and ultimately, creating value for shareholders,” he said.

Despite the current financial challenges, Pharmaniaga continues to demonstrate its resilience in the second quarter of the financial year ended June 30, 2023 (Q2’23), registering an improved financial performance. The improvement was primarily driven by higher sales in the non-concession segment as well as its operations in Indonesia.

The group reported revenue of RM848.7 million for Q2’23, an 11.5% increase from RM761.1 million in the same quarter last year. The better results demonstrate the effectiveness of the group’s market penetration strategy, efficient cost-management and expansion efforts.

Profit before taxation and zakat for the quarter stood at RM6.3 million, up by 40.3% from RM4.5 million reported in Q2’22. Profit after taxation and zakat for the quarter under review amounted to RM2.3 million, a jump of 154% from RM0.9 million in the same corresponding quarter last year. The results show the group’s perseverance in addressing significant challenges in managing finance costs.

Pharmaniaga’s non-concession segment proved to be a major growth driver, recording revenue of RM333.2 million, an increase of 27% from RM262.7 million registered during the same period last year.

Izaddeen said: “We are actively working towards the resolution of our reclassification to Practice Note 17 and progressing on track towards submitting the Regularisation Plan by Q3 FY2023. At the same time, the renewal of our concession agreement with the Ministry of Health is firmly under way. Having received the letter of award, we are now in the final stage of this process and anticipate signing the concession agreement by Q3’23.”