Hovid suffers Q3 loss on manufacturing licence revocation

PETALING JAYA: Hovid Bhd suffered a net loss of RM4.14 million in the third quarter ended March 31, 2017 compared with a net profit of RM1.48 million a year ago due to the revocation of its manufacturing licences during that period.

It resumed manufacturing activities for its Chemor plant in March and Ipoh plant on May 8 after the licences were reinstated.

Recall that its manufacturing licences for both its facilities in Chemor and Ipoh were revoked in January by the Health Ministry’s Pharmaceutical Services Division following an audit conducted by the National Pharmaceutical Regulatory Department.

Revenue for the quarter fell marginally to RM40.88 million from RM40.89 million a year ago.

For the nine months ended March 31, 2017, net profit plunged 58.65% to RM4.83 million from RM11.68 million a year ago due to lower revenue and the disruption in manufacturing activities caused by the revocation of licences.

Revenue for the period fell 2.56% to RM134.35 million from RM137.89 million a year ago, mainly due to lower local market tender sales. However, the loss in local sales was almost made up by the increase in export market sales.

Hovid said the outlook is expected to be satisfactory as it is expanding its tablet and capsule production facility and actively securing new overseas markets and registration of new products.

However, it cautioned that the fluctuation of the ringgit against the US dollar and the resulting unrealised foreign exchange gains/loss may cause some fluctuations to its ringgit-denominated financial results.

“The group will continue to enhance its competitive edge by continually placing emphasis in research and development and improving its production processes to achieve better efficiency,” it said.