Hyphens Pharma Limited has released its quarterly business update for 3Q2023 and 9M2023.
3Q2023 compared to 3Q2022
Revenue in 3Q2023 remained constant at S$42.8 million as 3Q2022, attributable to the following:
- Revenue from specialty pharma principals segment increased marginally by 0.6% despite the cessation of Biosensors products distributorship, coupled with improved shipment supply for key products sold in Vietnam and sales from new distributorship with Laboratoires Gilbert S.A.S.
- Revenue from medical hypermart and digital segment grew by 1.9%.
- Revenue from proprietary brands segment declined by 4.2% mainly due to a drop in Ceradan®
dermatological products sales, partially offset by increased sales in Ocean Health® health supplements.
Gross profit decreased by 11.9% to S$15.2 million in 3Q2023. Gross profit margin has dropped by 4.8% to 35.4% in 3Q2023, due to inflationary cost pressures.
Net profit after tax in 3Q2023 fell 47.2% from S$4.0 million in 3Q2022, which was a record quarter of the year. This was a result of lower gross profit and increased foreign exchange losses due to unfavourable local currency exchange rate movement against USD and EURO, which are the major currencies for supplies.
9M2023 compared to 9M2022
Revenue decreased by 4.8% to S$117.5 million in 9M2023. Key factors driving the change in revenue:
- Revenue from specialty pharma principals segment decreased by 8.3% mainly due to the cessation of Biosensors products distributorship at the end of 2022 and disruption in shipment for certain key products in 2023, partially offset by sales from new distributorship with Laboratoires Gilbert S.A.S.
- Revenue from medical hypermart and digital segment declined by 1.7%.
- Revenue from proprietary brands segment had improved by 3.9%, contributed by the overall higher
demand for Ceradan® dermatological products and Ocean Health® health supplements.
With the reduced revenue and drop in gross profit margin, gross profit decreased by 10.6% to S$43.2 million in 9M2023. Gross profit margin has declined by 2.4% to 36.7% in 9M2023, primarily attributable to inflationary cost pressures.
The Group’s net profit after tax in 9M2023 has decreased by 45.0% to S$5.7 million mainly due to reduced
gross profit, increased distribution costs with expanded workforce to support the Group’s long-term growth strategy, and increased foreign exchange translation losses.
Business Outlook
Management highlighted it will focus on its five key strategic areas:
- Growing their Proprietary Brands: Ceradan® and Ocean Health® continues to enjoy sustained growth, and Hyphens will explore untapped markets and invest new innovative products.
- Going Digital: DocMed remains actively engaged in strategic collaborations to create an integrated digital healthtech platform, including promising ventures in Malaysia and Vietnam.
- Expanding through Acquisitions: Recently just acquired the remaining stake in Ardence Pharma, and will look for more M&A opportunities.
- Strengthening their Specialty Pharma Portfolio: Actively seeking new licensing opportunities, leveraging Hyphens’ regulatory expertise, strong marketing capabilities, and reputation as a trusted local partner for the Group’s specialty pharma principals.
- Navigating a Challenging Macro-Economic Environment: Post-pandemic, supply chain disruptions have significantly impacted product availability, however this is gradually recovering in 3Q2023. Inflationary pressures have led to increased supply prices and operating expenses, affecting profit margins, while passing these costs to the market may introduce exchange rate risks against major currencies like USD and EURO.
Hyphens Pharma’s share price as of 9 November 2023 after market close was S$0.280.
