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Healthy Earnings at Health Management International

Health Management International Limited (SGX: 588) is a healthcare company with a presence in Singapore, Malaysia, Indonesia, Cambodia and Myanmar. HMI owns and operates two tertiary care hospitals in Malaysia –  Mahkota Medical Centre (MMC) in Malacca and Regency Specialist Hospital (RSH) in Iskandar Malaysia, Johor. HMI also owns and operates HMI Institute of Health Sciences in Singapore and Mahkota Institute of Health Sciences and Nursing in Malacca, Malaysia.

HMI posted a 17% revenue rise for Financial Year 2013 (FY2013) to RM245.4 million from RM209.2 million in the previous year. The revenue increased mainly because of higher patient load and occupancy rate in the two hospitals of MMC and RSH. The education business, however, registered a decrease in revenue of RM0.5 million due to lower student headcount. The gross profit margin increased by 4 percentage points to 29% in FY2013 due to the improved operation of RSH.

The net profit attributable to shareholders was RM7.6 million, an improvement from a loss of RM0.5 million in FY2012. The earnings per share for FY 2013 was at RM 0.0131 (0.01 Singapore cents).

As of 30th June 2013, it had RM63.6 million in total debt against a backdrop of RM9.7 million in cash.

The net cash inflow from operating activities was at RM26.4 million in FY2013 versus that of RM18.7 million in the previous year.

The company said that while the demand for private healthcare in Malaysia will remain resilient due to rising income levels, it is mindful of new competitors in the two markets of Malacca and Johor where it operates its hospitals in. MMC will see a new competitor by the middle of 2014, with the opening of the Oriental Melaka Straits Medical Centre. Also, two new hospitals, Hospital Pakar Hang Tuah and KPJ Muar Specialist Hospital, which are in or around the vicinity of Malacca, are being built.  Over in Johor, KPJ Pasir Gudang Specialist Hospital, which is less than 3km from RSH, began operations during this financial year. By 2015, there are expected to be three new hospitals in Johor.

The company has not paid any dividends so far. The shares closed at $0.121 on 30th August 2013.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.