Acquires Idaman Pharma Manufacturing Sdn Bhd

KUALA LUMPUR, August 10, 2011 – Pharmaniaga Berhad (Pharmaniaga) recorded a profit after tax of RM14.1 million for its second quarter ended 30 June 2011. For the cumulative period, the Group delivered an improved profit after tax of RM29.6 million, an increase of 24% compared with RM23.9 million recorded in the same period last year.

For the first six months of the financial year 2011, the Group registered a cumulative profit before tax of RM41.2 million, representing a 26% jump compared with RM32.8 million recorded in the corresponding period last year. These results were achieved on the back of significantly improved turnover of RM781.8 million for the cumulative period.

EPS improved as well for the half-year period to 27.5 sen compared with 22.5 sen in the same period last year.

YBhg Tan Sri Dato’ Lodin Wok Kamaruddin, Chairman, Pharmaniaga Berhad said, “The new management team is pleased that at the half year mark for this financial year, we have delivered an improved profit after tax on a significantly stronger turnover. This demonstrates that our initiatives in fulfilling customer needs are bearing fruit”.

Pharmaniaga also inked a memorandum of understanding (MOU) with a view to acquire a 51% equity interest in Idaman Pharma Manufacturing Sdn Bhd (IPMSB) from Boustead Idaman Sdn Bhd and in a separate MOU, a 49% equity interest in IPMSB from Idaman Pharma Sdn Bhd (IPSB). These acquisitions will be made for an indicative cash consideration of RM51 million and RM49 million respectively. Under the MOUs, the parties will proceed to negotiate the terms of the proposal with a view of formalising the terms of the share sale agreements within 30 days of the date of the MOUs.

Given that this is a related party transaction, Boustead Holdings Berhad (Boustead) will abstain from voting in respect of its direct and/or indirect shareholding in Pharmaniaga on the resolutions pertaining to the acquisition of IPMSB when this proposal is tabled for shareholders approval at an Extraordinary General Meeting (EGM). Additionally, Boustead will ensure that all persons connected to them will abstain from voting in respect of their direct and/or indirect shareholding in Pharmaniaga on the resolutions pertaining to the acquisition at the said forthcoming EGM. Prior to finalising the terms of the proposal, the Board of Pharmaniaga will appoint an independent adviser to advise the non-interested shareholders of Pharmaniaga on this proposal.

YBhg Tan Sri Dato’ Lodin said, “This corporate exercise will give us a stronger footing in the pharmaceutical industry as we anticipate synergistic benefits from the operations of IPMSB and Pharmaniaga collectively. We also stand to benefit from cost improvements as a result of streamlining and optimising manufacturing facilities, production capacities as well as the cross fertilisation and sharing of best practices between IPMSB and Pharmaniaga”.

“The successful completion of this corporate exercise should have a beneficial impact on the Group’s bottom line, not only from the acquisition of new contracts but also from streamlining of operations”, he concluded.

Upon completion of this corporate exercise, IPMSB shall be a wholly owned subsidiary of Pharmaniaga and will continue its business of manufacturing and distribution of pharmaceutical products. The acquisition will be funded via borrowings and internally generated funds.

Forward looking statements

This release may contain certain forward-looking statements with respect to the financial conditions, results of operations and business of the Group and certain plans and objectives of Pharmaniaga Berhad with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

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