Pharmaniaga Bhd’s stock experienced a significant boost of 12% in early trading today following the health ministry’s confirmation of a 10-year extension to its concession agreement for the supply of medicine and medical supplies to the ministry’s facilities. By 9:30am, the stock had risen by 4.5 sen to 42 sen.
Pharmaniaga’s rise in stocks
The concession agreement had previously been extended for six months until the end of June last year to facilitate ongoing negotiations. However, they faced challenges at the beginning of the year as it was classified under the financially troubled Practice Note 17 category in February. The company also reported a net loss of RM607.32 million for the financial year ending Dec 31, 2022, in contrast to a net profit of RM172.15 million in the prior year.
The decline in revenue by 27.1% to RM3.51 billion from RM4.82 billion was primarily attributed to reduced demand for Covid-19 vaccines by the government. The pharmaceutical brand had initially won the concession agreement in 1994 through its subsidiary Pharmaniaga Logistics Sdn Bhd and is currently majority-owned by Boustead Holdings Bhd, which holds a 52% stake, with an additional 8.6% stake held by Boustead’s parent entity Lembaga Tabung Angkatan Tentera.
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