This article first appeared in The Edge Malaysia Weekly on August 26, 2024 - September 1, 2024

Last week, TMC Life Sciences Bhd (KL:TMCLIFE) announced its fourth-quarter ended June 30, 2024 (4QFY2024) financials, which saw a 92% decline in its net profit and a 12% fall in revenue from a year ago. Net profit for the quarter stood at RM1.02 million while revenue totalled RM74.12 million.

To put things in perspective, this is TMC’s worst quarterly performance in 17 quarters.

In most cases, a steep decline in quarterly net profit would call for a lengthy explanation from companies in order to allay investors’ fears. However, TMC provided a one-sentence explanation saying the decline in revenue and net profit was related to “a combination of reduced patient volume and case intensity as well as termination of certain customer contracts and discounts given to customers”.

While reduced patient volume and case intensity are easily understood, no explanation was given by the company as to what or why customer contracts were terminated; nor did it say if such events in the reported quarter are one-off in nature or likely to be recurring.

Nevertheless, TMC did end the financial year with a higher revenue of 11.2% and higher net profit of 3.5% from the previous year.

It is also noteworthy that TMC Group CEO, Wan Nadiah Wan Mohd Abdullah Yaakob, has been suspended since January this year after several allegations of misconduct, with a domestic inquiry being undertaken after attempts at mediation failed. So far, the nature of the allegations has not been revealed.

In the meantime, TMC Life Sciences shares have slumped, losing more than a quarter of their value since mid-February this year. Last Thursday, its shares closed at 58.5 sen, testing its 52-week low of 57.7 sen, on Oct 24 last year.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.