Pharmaniaga vows recovery despite auditor's concerns

Pharmaniaga details strategies to exit Practice Note 17 status

10 May 2024 08:19pm
Pharmaniaga - File photo
Pharmaniaga - File photo

KUALA LUMPUR - Pharmaniaga Bhd said it "stands firm with its commitment to financial recovery amidst the opinion of its independent auditor PricewaterhouseCoopers (PWC) on the group’s 2023 financial statement, dated March 29, 2023.”

The group assured shareholders of its strong and steady progress, "backed by resilient business fundamentals and well-defined strategies to exit its Practice Note 17 status (PN17).”

Previously, the auditing firm raised the issue of Pharmaniaga’s ability to continue as a going concern based on the company’s 2023 financials.

Pharmaniaga executive director Zulkifli Jafar said in a statement today that the company’s commitment "is evident from the detailed roadmap to financial recovery that was published via requisite announcement in November 2023, and subsequently with the submission of the regularisation plan (RP) to Bursa Malaysia Securities in February this year.”

He noted that the RP, which is still pending approval from Bursa Malaysia, "outlines a holistic strategy to increase the equity of the group and minimise our accumulated losses.”

The approach "focused on capital reduction of approximately RM180 million issued share capital, fundraising of RM354.6 million via rights issuance for shareholders to strengthen their investments, and RM300 million in private placement for potential investors to participate in the group’s growth plans moving forward,” he shared.

"We have aggressively implemented various initiatives, which include but are not limited to streamlining all business operations; ceasing non-core and underperforming businesses; improving operational efficiency and cost optimisation via stringent cost containment and manpower rightsizing; tightening the group’s corporate governance; and improving margin by focusing on high value products and services.

"In addition, Pharmaniaga has also carried out a private placement exercise in July last year to fortify our cash flow,” he said.

In its pursuit of sustainable growth, he said Pharmaniaga has identified five strategic pillars that are the foundations of its operations which include strengthening the public sector business; building biopharmaceutical capabilities; reducing costs aggressively; growing the private market; and reinventing the group’s Indonesia business.

Zulkifli also reiterated that the financial situation has not affected the group’s operational efficiency, particularly its subsidiary Pharmaniaga Logistics Sdn Bhd (PLSB) which holds the logistics and distribution concession with the Ministry of Health (MOH).

"We have consistently excelled in meeting the MOH’s service standards, achieving scores of 98.75 per cent for 2023 and 99.26 per cent for the first quarter of this year.

These results stand as a testament to our undertaking in delivering exceptional services and products to our clients. Our commitment to MOH remains strong and intact,” he added.

"We have the capabilities and resources to overcome the challenges and achieve the targets, especially when the group has the unwavering support from our substantial shareholders, Lembaga Tabung Angkatan Tentera (LTAT) and Boustead Holdings Bhd,” he said. - BERNAMA