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The Covid-19 pandemic has provided opportunities as well as challenges for the health industry including PT Kimia Farma Tbk (“KAEF”). KAEF participates in organizing the Covid-19 vaccination program, providing and distributing antiviral drugs for Covid-19 in all regions of Indonesia. We should be grateful that the national Covid-19 situation has been under control. In the midst of this condition, KAEF always makes efficiency efforts to support its business continuity. Throughout 2022, KAEF has reduced operating expenses by 5.41% or IDR 189 billion compared to 2021. Operating expense efficiency is carried out by optimizing distribution costs for all products.
In addition, KAEF seeks to reduce the financial burden by 14.21% compared to the previous year. This decline was supported by banking support through reductions in interest rates and investment loans as well as refinancing.
"KAEF has recorded positive cash flow in 2022. At the end of December 2022, it was recorded that the value of cash and cash equivalents rose to IDR 2.15 trillion from 2021 of IDR 748 billion. This is supported by obtaining funds from corporate actions to unlock value of a subsidiary owned by KAEF, namely PT Kimia Farma Apotek ("KFA"). Investor confidence is proof that there are positive prospects for KAEF and the health industry in Indonesia," said David Utama, Main Director of KAEF.
This unlock value corporate action supports KFA's working capital and business development with the New Business Model with Digitalization, combining offline and online stores with an omnichannel strategy, integration of Pharmacy-Clinic-Lab Diagnostics, and New Digital Channel.
Meanwhile, after the corporate action, KFA's unlock value generated funds of IDR 1.86 trillion accompanied by a tax burden of IDR 76 billion. In addition, in 2022 KAEF's subsidiary, KF Dawaa in Saudi Arabia, posted a loss of IDR 24 billion due to the absence of Hajj and Umrah pilgrimages during the pandemic. With the corporate action and the condition of the subsidiary, it had an impact on recording a loss of IDR 109 billion.
KAEF sees that the prospects for the pharmaceutical and health care industries in 2023 are still experiencing growth, considering that health is one of the main factors that is of concern to all parties. At the beginning of 2023, KAEF has carried out several strategies to improve performance including massive marketing activities and market penetration. Apart from that, Kimia Farma has also conducted a Non Deal Roadshow (NDR) with investors to obtain a new business to be developed this year.
KAEF continues to make improvements in the health care and pharmaceutical retail sectors to improve the quality and reach of health services to the community, one of which is by establishing strategic alliances with strategic partners who have a global network, namely Parkway Pantai Group, which has competence in Clinics and Clinical Laboratories.
To make it easier to gain access to health products and services, KAEF also has an application, namely Kimia Farma Mobile (KF Mobile), which can be accessed by the entire community, which includes online product sales services and health services.
"KAEF is optimistic that in 2023 performance will continue to grow and contribute to positive profits and Cash Flow Operations that will remain positive until the end of 2023. KAEF continues to be committed to supporting the Government in improving public health," added David.