HMI profit doubles in Q4 to RM10.7m amid higher patient load, larger bill sizes
BOOSTED by a higher patient load and increasing average bill sizes at its two hospitals, Health Management International Ltd (HMI) reported on Thursday that net profit more than doubled to RM10.7 million (S$3.4 million) for the fourth quarter ended June 30, 2017.
The group's turnover for the quarter increased by 5.2 per cent, from RM106.2 million to RM111.7 million, compared to the same quarter a year ago.
The group's healthcare business - Mahkota Medical Centre and Regency Specialist Hospital - accounted for some RM4.4 million of the increase.
Despite incurring RM8.2 million in professional fees and other costs relating to a consolidation exercise, the group reported a 3 per cent increase in net profit from RM19.9 million to RM20.6 million for the financial year ended June 30 compared to the previous financial year.
Group chief executive officer Chin Wei Jia said: "This year, we actually saw an occurence of two Hari Raya periods in the same financial year, and of course the fasting month before that, impacting our patient load as well as our revenues.
"We've seen a strong comeback in July in terms of our patient load and revenues.
"While we see continued growth, we are mindful of the weaker economic sentiment in Malaysia, but we still see growth in both our local and overseas patient load."
The group's overseas patient load grew faster than its local patient load this year.
Chief financial officer Chin Wei Yao said: "We do see more and more foreign patients coming in this year because of the rising medical tourism as well as the exchange rate.
"Typically, a procedure in our hospitals costs about one-third of the cost in Singapore and bed charges are 15 per cent of Singapore's bed charges."
For this year, about 20 per cent of HMI's revenue came from medical tourism, with the majority being patients from Indonesia.
Ms Chin, the CEO, said: "Over the past years, we've seen sustained growth in patient load and revenue. We do expect to continue this trend in terms of reaching out to our local patients and increasing our outreach overseas to drive our medical tourism work more."
Despite rising staff costs across the industry and rising medical equipment costs due to the weaker ringgit, the group intends to focus on volume-driven growth and boost its reach by deepening networks in the region. "Mahkota is one of the pioneers in the medical tourism scene in Malaysia. As a single hospital, we see about 10 per cent of the total medical tourist load that comes into Malaysia," said Ms Chin.
Encouraged by this growth, HMI intends to leverage on technology to attract more medical tourists.
"When patients come, what they want is to get treated and quickly go home. At our hospital, we have set up operations such that patients, especially medical tourists, can come and get their procedures done in a short time. We want to streamline our operations so we can facilitate what medical tourists are looking for, which is good quality and good turnaround time," says Ms Chin.
The group intends to invest more in medical equipment and also leverage on technology that enhances the efficiency of the hospitals. Waiting times are tracked to improve the interface between different departments.
For this financial year, the group's education business reported a RM5.6 million increase in revenue due to higher student headcount.
It will develop its e-service training platform in its education institute so that it can reach out to more people.
While there are no concrete plans for expansion into other countries, HMI is looking to collaborate with businesses in the medical industry, with a focus on Singapore, Malaysia and Indonesia.