Pharmaniaga MD Farshila to step down on March 31

This article first appeared in The Edge Financial Daily, on January 22, 2020.
Pharmaniaga MD Farshila to step down on March 31
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KUALA LUMPUR: Pharmaniaga Bhd managing director (MD) Datuk Farshila Emran (pic) will leave the company when her contract expires at end-March this year, the country’s largest pharmaceutical company announced.

This confirmed a report by yesterday, citing a person with knowledge of the matter, that Pharmaniaga will not be extending Farshila’s contract when it expires.

In a filing with Bursa Malaysia yesterday, Pharmaniaga said Farshila, 54, is leaving “on completion of service contract” after nine years with the company. She joined Pharmaniaga’s board on March 25, 2011, before becoming its MD on April 1 the same year.

In a separate statement, Pharmaniaga said Farshila is currently pursuing her PhD.

It also confirmed that Mohamed Iqbal Abdul Rahman, currently serving as chief operating officer, will become acting MD following Farshila’s departure.

“Mohamed Iqbal will assume the role of acting MD of Pharmaniaga until such a time a MD of Pharmaniaga is appointed. Pharmaniaga assures that it will be business as usual and there will be a seamless transition across its groups of companies until a [new] MD is appointed,” it said.

As at Feb 28, 2019, Pharmaniaga is 67.32% owned by Lembaga Tabung Angkatan Tentera, of which 56.09% is held via Boustead Holdings Bhd.

According to Pharmaniaga’s Annual Report 2018, Farshila founded Idaman Pharma Sdn Bhd (IPSB) in 2001 and started her venture in the highly regulated pharmaceutical industry. Under her leadership, IPSB developed a synergistic partnership with Boustead and facilitated the acquisition of Pharmaniaga by Boustead in 2011.

Since end-2018, Pharmaniaga has seen several changes to its board, starting with the resignation of its chairman Tan Sri Che Lodin Wok Kamaruddin, 69, which Pharmaniaga announced on Dec 31 that year, citing a mutual early termination of his service agreement with Boustead as MD.

Subsequently, it saw four other board resignations, namely Tan Sri Dr Mohamed Ismail Merican, 71; Fahmy Ismail, 42; Ebinesan @ Daniel Gnanakkan, 73; and Izzat Othman, 57.

On July 17 last year, Datuk Dr Hafsah Hashim, 61, was appointed as independent and non-executive chairman of Pharmaniaga. Hafsah served the government for 36 years — during which she held senior positions like the chief executive officer (CEO) of SME Corp Malaysia — before retiring on Aug 15, 2018.

Other new appointments to the board included Datuk Koo Hock Fee, 68; Datuk Mohd Zahir Zahur Hussain, 44; and Brig Gen (R) Datuk Mohd Shahrom Mohamad, 66, as directors.

On Dec 24, 2019, Pharmaniaga announced the appointment of Dr Salmah Bahri, 61, as its independent and non-executive director effective Jan 1. She was the senior director of pharmaceutical services at the health ministry from Nov 1, 2016 to July 18, 2018.

The change of leadership at Pharmaniaga follows other key resignations related to government-linked companies and state-owned firms in recent times, including that of Keretapi Tanah Melayu Bhd CEO Mohd Rani Hisham Samsudin, Prasarana Malaysia Bhd CEO Mohamed Hazlan Mohamed Hussain and Malaysia Airports Holdings Bhd group CEO Raja Azmi Raja Nazuddin.

Shares in Pharmaniaga have fallen 25.6% over the past 12 months to close at RM2.09 yesterday, bringing it a market capitalisation of RM545.97 million.

The share price decline is partly due to news that Pharmaniaga’s concession to distribute drugs and medical supplies for the health ministry will end come Dec 31, 2021.

Nevertheless, it has managed to secure a five-year contract to continue providing logistics and distribution services to the health ministry for five years ending Dec 31, 2024.

For the cumulative nine months ended Sept 30, 2019 (9MFY19), Pharmaniaga posted a 22.7% decline in net profit to RM29.38 million from RM38.03 million a year ago, on lower contribution margins. Revenue for 9MFY19, however, rose 17.7% to RM2.1 billion from RM1.79 billion for 9MFY18 on solid performances from both its concession and non-concession businesses.

It declared dividends of 8.5 sen, amounting to RM22.1 million, for FY19.