TMC Life Sciences focusing on RM300m medical centre expansion, Q4 earnings surge

PETALING JAYA: TMC Life Sciences Bhd which saw Q4 net profit almost double, has received building plan approval from the local council for the RM300 million expansion of the Tropicana Medical Centre and is hoping to rope in a main contractor and start work for the project by the end of the year.
For the fourth quarter ended Aug 31, TMC’s net profit jumped to RM11.1 million from RM5.87 million in the previous corresponding period, bringing its full-year net profit 45.7% higher at RM26.03 million from RM17.87 million. The earnings growth was driven mainly by better cost management.
Revenue for the fourth quarter rose 16.3% to RM39.31 million from RM33.81 million, while full-year revenue grew 15.4% from RM131.43 million to RM151.71 million, attributable to higher patient load, additional consultants, continuing marketing activities and the increase in bed capacity from 150 to 250 in December. The group has proposed a final dividend of 0.167 sen for the quarter under review.
Speaking to reporters at a media briefing, group CEO and executive director Roy Quek said the expansion of the medical centre to accommodate 400 more beds is an “immediate priority” for the group as its operations are based there. It is also crucial for the group to continue its growth trajectory, as the additional capacity will be able to support physical constraint.
TMC is yet to determine the financing means for the expansion.
“We have RM200 million and we have a number of banks indicating their interest to finance us,” Quek said.
On earnings outlook for 2018, Quek said the group will have to spend money on the expansion as well as maintaining the functions of the existing hospital at current pace while expansion is being undertaken.
“With prudent management of cost we hope to be able to do as well if not better,” he said adding that growth will be more significant post expansion.
The group is targeting to complete the extension which is to be undertaken on a third of its existing six acre land in Kota Damansara by 2020.
Besides that, it is also hoping to secure the approval of the Health Ministry for its RM1.2 billion Thomson Iskandar Medical hub project in Johor by the first quarter of next year. The project, which is a part of the RM5 billion Vantage Bay Healthcare City, will accommodate 500 beds.
On another note, a corporate exercise is underway with controlling shareholder Singapore tycoon Peter Lim injecting his healthcare assets comprising 100% of Singapore-based Thomson Medical and 70.36% of TMC Life Sciences, into his Singapore listed real estate firm Rowsley Ltd.
Commenting on that, Quek said that the move is beneficial for TMC as it provides a bigger platform and resources for expansion.
While the Thomson Iskandar Medical hub is set to be constructed on the 4.14 acre land belonging to TMC Life Sciences, the remaining land for the proposed Vantage Bay project belongs to Rowsley. Vantage Bay is set to sprawl across 11ha of land.
Thomson Iskandar is expected to be completed within three years from the start of construction.
TMC had also entered into a memorandum of understanding with University College Dublin (UCD) to collaborate on health education in Malaysia and Singapore, which lapsed in July.
Quek said while UCD is still interested in working with TMC, planning can’t begin without a hospital (Thomson Iskandariah).
He added that other medical institutions from the UK had also expressed interest in working with TMC.
The group which currently operating six fertility centres across the country is also looking to expand the number of centres.