KUALA LUMPUR, 14 February 2020 – In an announcement to Bursa Malaysia this evening Duopharma announched gross profit of RM52.19 million. Duopharma Biotech Berhad formerly known as CCM Duopharma Biotech Berhad announced a commendable set of unaudited financial results to close off a strong performance in 2019 with yearly net profit increasing 16 percent to touch RM55.27 million on higher revenue of RM576.46 million.
For its fourth quarter ended 31 December 2019, the Duopharma Biotech group posted gross profit of RM52.19 million (2018: 49.89 million) on an increased turnover of RM137.76 million (2018: RM115.63 million). After accounting for taxation and other costs, the group posted a net profit of RM12.03 million (2018: RM14.37 million).
For 2019, earnings per share came in at 8.25 sen, or close to a 14 percent increase from the 7.26 sen posted in the previous corresponding year.
The Duopharma Biotech Board of Directors has recommended a final dividend of 5.0 sen per share (2018: a final dividend of 4 sen per share) translating to RM34.22 million (2018: RM26.48 million). The Board has resolved that the Dividend Reinvestment Plan (DRP) approved by the shareholders in 2018 would apply to this dividend, if the dividend is approved by the shareholders at the Company’s forthcoming Annual General Meeting.
This higher final dividend follows on from the Group having paid an interim dividend of 1 sen per share (2018: 1.5 sen) equivalent to RM 6.8 million (2018: RM9.93 million) during the fourth quarter of 2019. Out of the total cash distribution, a total of RM5.3mil was converted into 4,276,658 new ordinary shares of the Company at the conversion price of RM 1.25 per ordinary share under the DRP.
Duopharma Biotech’s Group Managing Director, Leonard Ariff Abdul Shatar, attributed the Group’s strong performance to higher demand for the group’s pharmaceutical products from both the private and public health sectors.
“The Group’s net profit also improved significantly due to higher sales and also lower provision of inventories in FY 2019,” he said.
Leonard also believes that, barring any unforeseen circumstances, the Duopharma Biotech Group is expected to achieve a satisfactory set of results in FY2020.
“The recent budget 2020 has seen an increase of 6.6 percent in allocation for healthcare sector to
RM 30.6 billion,” said Leonard, adding that this is the highest ever allocation in Malaysian history.
He also shared that the Duopharma Biotech group has also been recently informed that contract periods for the supply of pharmaceutical and/or non-pharmaceutical products to hospitals, clinics and others under the Malaysian Government have been extended for twenty five months, commencing 1 December 2019 until 31 December 2021.
“The extension augurs well for the Group as it stabilises a significant portion of the Group’s revenue
for the said period,” he said. “What’s more, it enables the Group to mobilise our resources to intensify our foray into specialty products as one of our strategies moving forward to create a pool of niche products.” “In addition, based on the Ministry of Finance’s Economic Outlook 2020, global growth for our industry is forecasted to improve to 3.5 percent in 2020 from 3.2 percent in 2019. Growth in 2020 is expected to be supported by stronger GDP performance in emerging market and developing countries, and this includes Malaysia. Our GDP is anticipated to improve in 2020 relative to 2019.”
Leonard, Managing Director
He also believes that the Malaysian economic outlook is expected to remain resilient with domestic demand anchoring growth, despite the prolonged trade dispute between major economies, geopolitical tensions as well as volatility in the global financial and commodity markets. However, the ongoing Covid-19 (Novel Corona Virus) outbreak may result in disruption in global supply chain and may create uncertainties in the market which may dampen the global economic outlook.