Pharmaniaga’s shares drop as net loss widens and restructuring plan raises concerns
- Pharmaniaga shares fell 12% on wider 3Q net loss
- Financial restructuring plan could dilute existing shares
- Third-quarter net loss widened to MYR49.34 million
- Capital reduction plan involves cancellation of MYR180 million worth of issued share capital
- Kenanga Investment Bank expects Pharmaniaga to post a 2023 net loss of MYR41 million
Pharmaniaga Bhd. experienced a significant drop in its shares as its third-quarter net loss widened and a financial restructuring plan was announced. The company’s shares fell by 12% in early trade, bringing its loss over the past year to 33%. Pharmaniaga reported a net loss of MYR49.34 million for the third quarter, compared to a loss of MYR13.99 million in the same period last year. The loss was mainly due to a one-off provision of MYR65.2 million for expiring pandemic-related consumables inventory. In addition, Pharmaniaga announced a capital reduction plan that involves the cancellation of MYR180 million worth of issued share capital, along with a rights issue of 1.18 billion new shares and a private placement of 714 million new shares. The financial restructuring plan has raised concerns about the dilution of existing shares. Kenanga Investment Bank, which maintained an underperform rating on Pharmaniaga’s stock, now expects the company to post a net loss of MYR41 million in 2023, compared to its previous expectation of a MYR34 million profit. The bank’s analyst, Raymond Choo Ping Khoon, remains cautious about Pharmaniaga’s outlook and highlights the company’s inability to pay dividends due to negative shareholders’ equity. Choo also notes that the company may need to price its products more competitively as the government seeks better value for money in medical-supply contracts.
Factuality Level: 7
Factuality Justification: The article provides specific information about Pharmaniaga’s third-quarter net loss, revenue, and financial restructuring plan. It includes quotes from analysts and mentions the company’s negative shareholders’ equity. However, it does not provide any counterarguments or alternative perspectives, and it does not provide a comprehensive analysis of the company’s overall financial health or future prospects.
Noise Level: 3
Noise Justification: The article provides relevant information about Pharmaniaga Bhd.’s financial performance and restructuring plan. It includes details about the company’s net loss, revenue, and the impact of a one-off provision for expiring pandemic-related consumables inventory. The article also mentions the dilution of existing shares due to the capital reduction plan and rights issue. It quotes analysts’ opinions on the company’s stock and outlook. Overall, the article stays on topic and provides factual information without excessive noise or filler content.
Financial Relevance: Yes
Financial Markets Impacted: Pharmaniaga Bhd.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses Pharmaniaga Bhd.’s third-quarter net loss widening and a financial restructuring plan that could dilute existing shares. This information is relevant to financial markets and the company’s shareholders.
Public Companies: Pharmaniaga Bhd. (N/A)
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