PETALING JAYA: Pharmaniaga Bhd’s share price tumbled as much as 48 sen or 19.2% to a low of RM2.02 today after news that the Health Ministry would be ending its 10-year concession.
At 4.38pm, its shares were trading 26 sen or 10.4% lower at RM2.24 on 1.16 million shares changing hands.
Short selling of its shares has also been suspended for the rest of the day due to the heavy selling pressure.
In a short statement released this afternoon, the company said it was optimistic of its capabilities to continue serving the nation.
“As the government believes in meritocracy, the company is confident that its performance will be the key factor to continue its services either through extension of concession or open tender contract.
“Pending [the] Cabinet’s decision, it is business as usual and we will continue to provide our best services for the rakyat, consistent with our tagline Passion for Patients,” it said.
The concession to supply to public hospitals accounted for 70% of Pharmaniaga’s revenue and about 26% of its net profit for the financial year ended Dec 31, 2018.
Earlier this afternoon, Health Minister Datuk Seri Dr Dzulkefly Ahmad said there would be no more concessionaires for logistics and distribution services for medical supplies, with an open tender system introduced instead.
However, to ensure medical supplies and health services are not disrupted, Pharmaniaga’s services will be extended until the cabinet decides on the mechanism to manage the open tender.
Dzulkefly was reported as saying that it would be presenting the matter to the Cabinet for it to decide on the mechanism for open tender, which is expected to be ready by the first quarter of next year.
source https://www.thesundaily.my/business/pharmaniaga-down-as-much-as-19-2-on-ending-of-10-year-concession-LH1559379
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