The Jakarta Post
State-owned pharmaceutical company PT Kimia Farma plans to cut capital allocation and costs to maintain its performance during the COVID-19 pandemic, but still expects to see increased revenue this year.
President director Verdi Budidarmo said on Tuesday that the company was lowering its capital allocation for the year to Rp 1.44 trillion (US$92.38 million), almost 38 percent lower than last year's allocation of Rp 1.98 trillion.
The company's capital allocation totaled Rp 4.67 trillion in 2017-2019, when it completed most of its investments.
“Back in 2017 to 2019, we were focused on investments for our new plant in Banjaran, West Java, as well as our other production facilities for raw materials in Jakarta and [for] syringes in Cikarang, West Java,” Verdi said during a hearing on Tuesday with House of Representatives Commission VI overseeing trade, industry and state-owned enterprises (SOEs).
During the same three-year period, the publicly listed company also expanded its business by opening more retail pharmacies, clinics and diagnostic laboratories in the country, as well as by developing health and beauty products. It also acquired Saudi Arabia's Dawaa Medical Limited Company to establish retail pharmacies abroad.
Verdi said that Kimia Firma also planned to reduce its business loans this year, from Rp 8.27 trillion in 2019 to just Rp 7.43 trillion, but did not elaborate on how it would achieve this.
“We are also slashing our operating expense budget to Rp 3.5 trillion this year, Rp 280 billion lower than Rp 3.76 trillion previously,” he said.
Despite the tougher challenges this year, Verdi expressed confidence during the hearing that the company would earn 25 percent more revenue this year through its continuing support for the Health Ministry, the Disaster Mitigation Agency (BNPB) and other relevant state institutions in the nation's fight against COVID-19.
“With our support in providing medicines, medical equipment and services in managing the COVID-19 pandemic, we believe that we can achieve our revenue target of Rp 11.7 trillion this year,” he said.
Last year, Kimia Farma made Rp 9.4 trillion in revenue, up 11.13 percent compared to its revenue in 2018.
The company's shares have increased 2.4 percent since January, and increased 6.22 percent on Wednesday morning to Rp 1,280 per share.