Duopharma Biotech Announces 1 For 3 Bonus Issue After Sterling 1st Quarter 2021

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Kuala Lumpur, 5 May 2021 – Duopharma Biotech Berhad (“Duopharma Biotech” or “the Company”) has proposed a one-for-three bonus issue after posting a sterling first quarter 2021 ended 31 March 2021 with profit before tax climbing to RM23.18 million, soaring more than 30% from the RM17.73 million posted in the preceding year corresponding period.

This commendable achievement was made against quarterly revenue of RM166.45 million (2020: RM158.71 million), the Company announced to Bursa Malaysia Securities Berhad (“BursaSecurities”) yesterday.

After accounting for taxation, net profit for the quarter was recorded at RM17.61 million (2020: RM13.56 million), translating to earnings per share (EPS) climbing to 2.49 sen for the quarter, from the 1.98 sen posted previously.

The 1-for-3 proposed bonus issue would entail the issuance of up to 239,926,896 new ordinary shares on an entitlement date to be determined and announced later, and subject to approvals from Bursa Securities, shareholders at a meeting of members to be convened and other relevant authorities.

In the same announcement, the Company also said that, on 22 February 2021, the Board of Directors had resolved that the Dividend Reinvestment Plan (“DRP”) approved by shareholders at the Company’s Extraordinary General Meeting held on 31 May 2018 would apply to the Second Interim Dividend of 6.0 sen per share amounting to approximately RM42.36 million.

The issue price of the new ordinary shares in the Company to be issued pursuant to the DRP has been fixed at RM 3.08 per new Duopharma Biotech Berhad share. The issue price is at a discount of approximately 10% to the 5-day ex-dividend volume weighted average market price (VWAMP) of RM 3.42.

The entitlement date for the Second Interim Dividend was on 22 April 2021, whilst the payment date for the Second Interim Dividend will be on 21 May 2021. The last day for submission of the Dividend Reinvestment Form will be on 10 May 2021.

Duopharma Biotech Group Managing Director Leonard Ariff Abdul Shatar attributed the stronger financial performance to improved revenue from higher sales to the consumer healthcare sector during the period.

Profit for the quarter also climbed as compared to the previous corresponding period mainly due to increase in sales during the quarter, coupled with forex losses posted in last year’s corresponding period.

Looking ahead, he expressed optimism that the Company would continue with its strong financial trajectory for the rest of 2021.

Based on Ministry of Finance’s Economic Outlook 2021, Malaysia’s GDP is expected to rebound between 6.5% and 7.5% in 2021, after an estimated 4.5% contraction in 2020, mainly resulting from the adverse impact of the COVID-19 pandemic.

Budget 2021 also saw an increase of 4.2% in allocation for healthcare sector to RM 31.9 billion, the highest allocation in the country’s history. In addition, the following developments augur well for the business of Duopharma Biotech:

  • The Group was recently notified that the Contract Period of the Agreement for the Supply and Delivery of Human Insulin Products under the Government of Malaysia has been extended by one (1) year effective from 2 December 2020 until 1 December 2021 with an additional contract value of RM19,625,100;
  • The contract period of the Supply Agreements for the supply of pharmaceutical and/or non- pharmaceutical products to hospitals, clinics and others under the Government of Malaysia have been extended for twenty-five (25) months, commencing 1 December 2019 until 31 December 2021

“The extensions augur well for the Group as it stabilises significant portion of the Group’s revenue for the said period and enables the Group to mobilise our resources to intensify its foray into the specialty products as one of its strategies moving forward to create a pool of niche products,” said Leonard.

In addition, Duopharma Biotech also recently entered into a Term Sheet Agreement with the Ministry of Health to supply 6.4 million doses of the Covid-19 vaccine known as “Sputnik V” developed by the Gamaleya National Research Institute of Epidemiology and Microbiology (“Gamaleya”).

Furthermore, the Company has signed a Term Sheet Agreement with the Russian Direct Investment Fund (“RDIF”) to secure the 6.4 million doses of “Sputnik V”. RDIF is the appointed marketing agent for Gamaleya for all international markets.

The supply is subject to the execution of the definitive supply agreements between RDIF and Duopharma and between MOH and Duopharma, as well as the approval of the vaccine by the Drug Control Authority, Malaysia (“DCA”). All efforts have been put in place in order to expedite execution of these agreements.

Pending the execution and signing of definitive supply agreements and conditional registration approval by DCA, the management of vaccine supply is expected to contribute positively to the future earnings of Duopharma Biotech Group for the financial year ending 31 December 2021.