Expansion work for TMC has begun and will make the hospital 1 of the biggest in terms of bed capacity
By KEVIN WONG
Healthcare provider TMC Life Sciences Bhd (TMCLSB) has invested about RM1.6 billion for the expansion of the Tropicana Medical Centre (TMC) in Kota Damansara, Selangor, and its upcoming hospital in Vantage Point, Johor Baru (JB).
TMCLSB group CEO Roy Quek Hong Sheng said expansion work for the Kota Damansara hospital has begun and would make the hospital one of the biggest in terms of bed capacity.
“With the expansion, we will add 400 beds to the existing 205 beds, making TMC one of the biggest hospitals in the area.
“For our Thomson Iskandar project in JB, we are targeting to get the final approval by the first quarter (1Q) or 2Q of this year,” he said, adding that the group is in the final phase of discussion with the relevant authorities.
The company had allocated RM260 million for the TMC expansion and another RM100 million for equipment and internal outfitting.
The company had budgeted up to RM1.2 billion for the Thomson Iskandar project comprising the construction, outfitting and equipment.
The Johor project will be an integrated development comprising a 500-bed general hospital with a medical tower, 400 medical suites and a retail mall.
Commenting on acquisition plans, Quek said the company would consider acquisitions which would complement the group’s business.
“Yes, we are looking, but we are looking at businesses within the same sector, especially those with which we can have synergies,” he said after the group’s AGM in Petaling Jaya yesterday.
In terms of funds for future acquisitions, he said there are many options available to the group, which also included leveraging on its new shareholder, Rowsley Ltd, upon the completion of the ongoing corporate exercise at our current shareholder level.
“It will be up to the board of Rowsley to determine how much they would be giving us as they will generate up to S$2 billion from its acquisition in December which is currently still ongoing and yet to be completed” he said.
The Singaporean real estate and investment company had acquired 100% of Sasteria (M) Pte Ltd, which holds a 47.3% stake in TMCLSB, from businessman Peter Lim Eng Hock.
When asked about the medical tourism in Malaysia, Quek credited the government for heavily pushing its growth.
“Looking at the Thomson Iskandar project, it is clear that one our target markets is Singapore as it is located about five minutes away from the Johor-Singapore Causeway and the future rapid transit system in JB.
“So, it will be convenient for Singaporeans and expatriates from Singapore, as well as for medical tourists who are transiting from Singapore into Johor,” he said.
In view of the strengthening ringgit, Quek believes it will not affect the growth of the medical tourism industry.
“Looking at how the Singapore dollar is almost three times the cost of the ringgit, I believe Malaysia is more efficient, as well as cost effective for medical tourists to come here instead.
“At the same time, we provide comparable quality to Singapore at the fraction of the price,” he said.
Additionally, TMCLSB expects 25% of revenue to come from foreign patients.
TMCLSB’s revenue for the 1Q ended on Nov 30, 2018, was up by 15% to RM41.7 million from RM36.2 million in the corresponding period in the previous year.
Higher revenue was attributable to higher patient load and higher intensity of cases handled by the firm.
The group recorded a net profit of RM6.3 million as compared to RM4.4 million in the previous year.
Also in the 1Q, the group achieved higher earnings before interest, taxes, depreciation and amortisation (Ebitda) margin of 23% (RM9.4 million) compared to 18% (RM6.6 million).
The higher Ebitda margin has translated into strong growth in the group’s Ebitda and net profit for the quarter, at 42% and 43% respectively.
The higher Ebitda margin was mainly driven by better cost management.
As a result of the higher net profit, earnings per share was increased by 38%, from 0.26 sen to 0.36 sen.
(The article has been edited for correctness and clarity based on the feedback from related stakeholders.)