KUALA LUMPUR (July 12): Pharmaniaga Bhd announced on Wednesday (July 12) that it has bagged a new seven-year concession agreement to provide medical supply logistics services to the Ministry of Health (MOH), following the end-June expiry of the six-month extension on its concession agreement with the government for the provision of medicines and medical supplies.
In a bourse filing, the Practice Note 17 company (PN17) said MOH issued the group's wholly-owned Pharmaniaga Logistics Sdn Bhd (PLSB) a letter dated July 12 for the contract, which took effect from July 1, 2023 and will last till June 30, 2030.
The value of the contract, however, was not disclosed. It is also not clear how the new agreement varies with its previous concession agreement, which it originally secured in 1994.
"Following the issuance of the letter, the interim period which commenced on Dec 1, 2019 to provide the services for the provision of medicines and medical supplies has ended. While MOH and PLSB finalise the terms of the new medical supply logistics services agreement, PLSB will continue to support and render its services to MOH based on the agreed salient terms," the group said.
PLSB was initially granted the concession agreement by the MOH in 1994 to supply public health facilities with medicines and medical supplies for 25 years. The contract was then given a five-year extension for an interim period of 25 months, from Dec 1, 2019 to Dec 31, 2021. Another six-month extension was then granted from end-December last year till end-June this year, pending the finalisation of a new concession agreement.
Although Pharmaniaga was classified as a PN17 company in February this year after falling into losses following a massive half a billion ringgit impairment, Health Minister Dr Zaliha Mustafa told reporters two months later in April that MOH would continue its concession agreement with Pharmaniaga "for another 10 years", which drew a lot of flak given Pharmaniaga's PN17 status.
The group recorded negative equity following its largest ever quarterly net loss of RM664.39 million for its fourth quarter ended Dec 31, 2022, against a net profit of RM85.47 million a year earlier, after having to make provisions of RM552.3 million for its stock of unsold Covid-19 vaccines.
Pharmaniaga is 52%-owned by the recently delisted Boustead Holdings Bhd, which is 97.63%-owned by Lembaga Tabung Angkatan Tentera (LTAT) following its privatisation of the group. LTAT also has a direct 8.6% interest in Pharmaniaga.
Pharmaniaga's shares closed three sen or 8.45% higher at 38.5 sen on Wednesday, valuing the group at RM504.43 million.