TMC Life Sciences' 2Q profit up 44.7% as revenue expands

by **Cals** Sat 23 Jan 2016, 02:05

TMC Life Sciences' 2Q profit up 44.7% as revenue expands

By Billy Toh / theedgemarkets.com | January 22, 2016 : 7:12 PM MYT

KUALA LUMPUR (Jan 22): [size=16]TMC Life Sciences Bhd ([You must be registered and logged in to see this image.] Valuation: 1.40, Fundamental: 1.45) saw its net profit rise 44.7% in its second quarter ended Nov 30, 2015 (2QFY16) to RM3.3 million from RM2.3 million a year ago, as its revenue grew with higher patient load and interest income.

Its bourse filing today showed that revenue for 2QFY16 came in 25% higher at RM31.3 million compared with RM25.1 million in 2QFY15.

"The higher revenue was contributed by higher patient load supported by expanded bed capacity and additional consultants recruited," it said.

For the cumulative half-year period (1HFY16), TMC Life's profit more than doubled to RM6.2 million from RM3 million a year ago, while revenue grew 27% to RM61.4 million from RM48.3 million in 1HFY15.

TMC Life said higher costs were incurred to retain and recruit experienced healthcare professionals to manage the group's expanded capacity, but it managed to optimise existing resources to improve its earnings before interest, tax, depreciation and amortisation (EBITDA) margin to 17% from the 1HFY15's 13%.

It said growth prospects for Malaysia's healthcare sector remains positive, fuelled by changing demographics, a more affluent society and more health-conscious lifestyle in the country. Medical tourism is also going strong.

"With the recent completion of the two new wards comprising 51 beds, our hospital in Kota Damansara is now a 200-bed hospital to meet the growing demand," said TMC Life.

It said the goods and services tax, rising manpower and overhead costs could impact its overall operational costs going forward, but it remains optimistic that its expansion will generate more revenue growth.

TMC Life's shares closed 0.5 sen or 0.8% higher at 67 sen today, valuing it at RM1.16 billion.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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