Duopharma Biotech optimistic on 2024 outlook with Q1FY2024 results

New supply agreements secured with the Government of Malaysia amounting to approximately RM578.09 million Company continuing focus on strategic collaborations to drive sustainable growth, leveraging strengths and seizing local and regional opportunities

KUALA LUMPUR, May 23, 2024 -- Duopharma Biotech Berhad ("Duopharma Biotech" or "the Company") reported a 15.2% increase in revenue for the quarter ended 31 March 2024 compared to the preceding quarter, with a revenue of RM192.97 million compared to RM167.50 million in the last quarter ended 31 December 2023. Year-on-year, however, the Q1FY2024 revenue lagged the same period year, down 3.7% from Q1FY2023, which recorded revenue of RM200.48 million.

The results are also reflected in the profit before tax (PBT) for the first quarter of 2024, which amounted to RM20.10 million, compared to RM28.29 million in the corresponding period last year, a decrease of 29.0%. Meanwhile, the PBT for Q1FY2024 saw significant recovery quarter-on-quarter, coming in at 185.8% higher than the RM7.03 million PBT recorded in Q4FY2023.

The marginally lower year-on-year revenue and PBT were attributed to lower demand in the prescription pharmaceutical markets, both in the private ethical and public health segments. Additionally, increased operational costs associated with the full operation of the newly completed K3 facility, higher finance costs and unfavourable exchange rates have contributed to the decline in profitability.

Leonard Ariff Abdul Shatar, Group Managing Director of Duopharma Biotech, commented, "The persistent challenges, such as strengthening in the United States Dollar, high electricity tariffs and high interest rates, continue to pose pressure on manufacturing margins and overall profitability. However, the Group remains focused on enhancing operational efficiencies internally to cushion the surge in operational and finance costs caused by these challenges."

Recently, Duopharma Biotech subsidiaries Duopharma (M) Sendirian Berhad and Duopharma Manufacturing (Bangi) Sdn Bhd respectively received and accepted seven and four Letters of Offer from Pharmaniaga Logistics Sdn Bhd to supply pharmaceutical and non-pharmaceutical products to the Government of Malaysia's offices and facilities. All contracts are valid until 31 December 2026 with a total estimated value of approximately RM578.09 million.

The record-high budget allocation of RM41.20 billion for the healthcare sector in Malaysia's 2024 Budget is anticipated to continue to increase demand for medical supplies, benefiting pharmaceutical players in the market.

Despite ongoing challenges, Duopharma Biotech remains optimistic about the future, with a steadfast commitment to its long-term growth prospects. "We will continue to focus on strategic collaborations to navigate challenges and drive sustainable growth in the coming quarters, leveraging our strengths and seizing local and regional opportunities to deliver value to our shareholders. With the acceptances of new supple agreements with the Government of Malaaysia, the Group poised to deliver satisfactory performance in 2024, barring unforseen market changes and developments." Leonard Ariff added.

The Board of Directors did not recommend any interim dividend for the current quarter ended 31 March 2024, Meanwhile, during Q1FY2024, the Group paid a second interim dividend of 1.8 sen in respect of financial year ended 31 December 2023, amounting to total divendend of 2.3sen per share paid for financial year ended 31 December 2023.

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