KUALA LUMPUR (June 6): Permodalan Nasional Bhd's (PNB) 44.11%-owned associate Duopharma Biotech Bhd (KL:DPHARMA) is currently reviewing merger and acquisition (M&A) proposals for firms in Indonesia and the Philippines, as it bids to diversify revenue streams geographically in order to reduce a reliance on ringgit-denominated earnings, said managing director Leonard Ariff Abdul Shatar.

Speaking at a press conference after the pharmaceutical company’s annual general meeting, Leonard Ariff said that the group is eyeing M&A activities within Asean at the moment for ease of control.

“We are looking at candidates in the Philippines and Indonesia, we are evaluating [the proposals] at this stage,” said Leonard.

As at end-March, the group’s cash balance stood at RM232.32 million, while total borrowings totalled RM528.3 million. The company raised RM364 million through the issuance of the first tranche of its RM2 billion Islamic bond programme in September last year.

Leonard explained that Duopharma intends to increase the share of export to total sales, noting that foreign currency-denominated sales act as a natural hedge against the procurement of raw materials priced in US dollars.

“For this year, we expect at least 15% growth for exports in the Asean countries,” he said. Compared to 2023, the group’s export growth was around 7%, driven by the Singapore and Philippine market amid increase in sales driven by new tenders and growth in the private ethical channel.

On its financial performance, Duopharma’s net profit for the first quarter ended March 31, 2024 (1QFY2024) dropped 32.5% to RM15.28 million from RM22.63 million a year earlier, amid lower demand for its prescription pharmaceutical products, higher costs as well as unfavourable exchange rates. Quarterly revenue fell 3.74% to RM192.97 million from RM200.48 million.