KUALA LUMPUR (March 14): Pharmaniaga Bhd’s chief executive officer Datuk Zulkarnain Md Eusope has resigned with effect from Tuesday (March 14), lasting less than three weeks in the position.

In a filing with the local bourse, the company said Zulkarnain, 55, is vacating the position “to pursue other interests”.

Zulkarnain was appointed as CEO on Feb 22, 2023, after he was promoted from the position of Pharmaniaga’s managing director — a role he held since Sept 1, 2020.

It had been hoped that Zulkarnian would be able to resolve the financial crisis at Pharmaniaga, which for the fourth quarter ended December 2022 reported its largest ever quarterly loss of RM664.39 million, dragged down by a massive RM552 million impairment of unsold Covid-19 vaccines.

In a separate filing on Tuesday, Pharmaniaga said the group will continue its business as usual. “In the interim, an executive committee comprising of Ahmad Shahredzuan Mohd Shariff (non-independent non-executive director), Zulkifli Jafar (deputy chief executive officer), Mohamed Iqbal Abdul Rahman (chief operating officer) and Norai’ni Mohamed Ali (chief financial officer) will take over the responsibility and perform the functions of the chief executive officer.”

In relation to the company’s Practice Note 17 (PN17) regularisation plan, it said the executive committee would report to the newly formed PN17 board committee taskforce chaired by independent non-executive director Datuk Lim Thean Shiang.

On Feb 27, Pharmaniaga had become an affected listed issuer under PN17, affected by the massive impairment, and is now required to submit a regularisation plan to the Securities Commission Malaysia within 12 months.

In 4QFY2022 the company reported a loss per share of 49.19 sen, against earnings per share of 6.53 sen in the same quarter last year.

This was despite a 21.22% growth in quarterly revenue to RM862.72 million, from RM711.72 million before. It said the higher revenue was due to “healthy growth” across the group’s concession, non-concession and Indonesian businesses, as a result of strong demand from customers following the resumption of normal business activities after the Covid-19 pandemic.

However, Pharmaniaga noted that the increase in revenue was partially offset by lower revenue from the sale of Covid-19 vaccines, as “the country is entering into the endemic phase”.

The group’s balance sheet as at Dec 31, 2022, shows that its short-term borrowings, which would be due within six months, ballooned to RM968.27 million from RM570.05 million a year ago. Its long-term borrowings amounted to RM190.6 million versus RM285.17 million.

Notably, the pharmaceutical firm’s receivables increased to RM351.66 million as at end-2022 from RM297.75 million a year ago. Its cash balance was at RM52.84 million, while its inventory dropped to RM767.26 million from RM1.26 billion a year ago, after the impairment.

The massive quarterly loss spooked investors, as roughly RM222 million of the company’s market capitalisation evaporated after its share price posted a single-day loss of 38.6% to 27 sen on Feb 28.

The stock subsequently sank further to a near three-year low of 25 sen on March 2, before recouping some of the losses.  

In the first trading session on Tuesday, the stock was traded one sen or 3.28% lower at 29.5 sen, giving it a market capitalisation of RM387 million.