Thomson posts $3.52m Q2 profit

Reversal from loss for year-ago period comes as revenue rises 21%

HIGHER revenue from hospitals and contributions from two new medical centres helped Thomson Medical Centre earn a net profit of $3.52 million for its second quarter ended Feb 28, reversing the $926,000 net loss chalked up in the same period last year.

Revenue jumped 21 per cent to $18.87 million, on the back of strong performances by hospital operations and ancillary services, and specialised and other services.

For the first six months, net profit surged 266 per cent to $7.05 million on a 17.7 per cent rise in revenue to $37.66 million. Q2 earnings per share rose from 1.05 cents to 1.21 cents per share.

The top line was bolstered by contributions from Thomson Paediatric Centre (TPC), which opened on Jan 1 this year, and Thomson Women’s Cancer Centre (TWCC), which opened in February 2009. ‘We expect TWCC and TPC to be future growth drivers,’ said group chief executive Allan Yeo.

A Q2 8.3 per cent increase in the number of babies delivered helped boost revenue from hospital operations and ancillary services.

‘Our hospital operations currently have about a 70 per cent occupancy rate,’ said Mr Yeo. ‘We still have the capacity to increase our occupancy levels. We will also continue to look for ways to manage bed utilisation more effectively.’

Two more operating theatres and two delivery suites will be added to cater for more operating procedures and deliveries.

A higher patient load at the Family Clinic and Thomson Lifestyle Centre enhanced Q2 revenue from outpatient services by 8.6 per cent.

Mr Yeo said Thomson will continue to expand its network of satellite women’s clinics and specialised centres here.

Thomson is paying an interim dividend of 1.2 cents per share, which will be paid out on May 7. Its shares closed unchanged at 69.5 cents in trading yesterday.

Thomson also said yesterday in an announcement to the Singapore Exchange that its consultancy and management project in Vietnam, Hanh Phuc International Women and Children Hospital, has been delayed. The soft opening will now take place in September this year.

Thomson Medical Centre’s H1 net profit up 22% to S$7.2m

Thomson Medical Centre on Thursday said its half-year profit rose 22 per cent on-year to S$7.2 million.

Revenue for the six months to February rose about 18 per cent to some S$38 million.

Thomson Medical said the improvement in its performance was driven by higher deliveries, inpatient admissions and demand for outpatient services.

It also saw higher revenues from its Thomson Women’s Clinics, Thomson Women Cancer Centre and Thomson Paediatric Centre.

Going forward, Thomson Medical sees its growth drivers coming from its satellite clinics, and new paediatric and women’s cancer centres.

On the regional front, the soft opening of its hospital consultancy and management project in Vietnam’s Binh Duong Province has been delayed to September.

But Thomson Medical said the delay will not affect its financial results this year.

The Group said its second hospital consultancy project in Hanoi, Vietnam, will commence once a suitable site has been identified.

Allan Yeo, group chief executive, said: “We will probably be one of the so-called chain of hospitals for women and children, probably one of the larger chains, and we intend to bring our expertise with us to Vietnam, and to work with our Vietnam partner to look at the local culture, and to deliver the best of both worlds.”

In the second quarter, Thomson Medical’s net profit rose 19.1 per cent to S$3.64 million on revenues of S$18.9 million.

Thomson’s Q1 earnings climb 24%

It has completed business plan for second Viet project

INCREASES in in-patient admissions, deliveries and ancillary services helped Thomson Medical Centre, a healthcare provider for women and children, deliver a healthy set of results for its fiscal first quarter ended Nov 30, 2009.

Net profit rose 24 per cent year-on-year to $3.53 million, while revenue grew 14.6 per cent to $18.79 million.

Earnings per share were 1.21 cents, up from 0.98 cents.

Revenue from its hospital operations and ancillary services segment – which constitutes about three quarters of the group’s total revenue – was 10.9 per cent higher at $14.24 million.

Revenue from the specialised and other services segment jumped 28.2 per cent to $4.55 million as its Thomson Women’s clinics saw more patients.

Meanwhile, Thomson Women Cancer Centre, which has been up and running since February last year, has begun to contribute positively to the group’s bottom line.

Thomson also said in an announcement yesterday that a senior O&G specialist is expected to take up clinic tenancy in Thomson Medical in Q3 FY2010 while a new satellite clinic is slated to commence operations in Q3 FY2010.

Its hospital consultancy and management project in Vietnam – Hanh Phuc International Women and Children Hospital – will also start operating in Q3 FY2010. The group has completed the business plan for its second hospital consultancy project – a proposed women and children’s hospital also in Vietnam. A suitable land site in Hanoi now has to be found.

‘Our strategic intent is to leverage on our brand name to attract more senior O&G specialists to take up clinic tenancy and expand our reach via a wider network of satellite clinics islandwide,’ said executive chairman Cheng Wei Chen.

‘At the same time, we will continue to work with specialists and suitable business partners to grow organically and develop more value-added, efficient and effective services for our patients.’

Thomson rose half a cent in trading yesterday to close at 69 cents.

Continues to deliver

Thomson Medical’s 1QFY10 results were within our expectations. Earnings jumped 23.9% YoY to S$3.5m on the back of a 14.6% YoY increase in revenue to S$18.8m, due to increased baby deliveries and higher utilisation of its specialist services. Its growing Thomson Women’s Cancer Centre (TWCC), which started operations in Feb 09 also contributed to the improved revenue. Going forward, its Singapore operations are expected to continue doing well, with the addition of another O&G specialist tenant in 3QFY10 and opening of new Thomson Women’s Clinics (TWC) in its network. Its Vietnam ventures are progressing well. Its hospital in Binh Duong is set to start operations in 3QFY10 and Thomson Medical has completed the business plans for another hospital project in Hanoi. Maintain BUY and target price of S$0.78.

JV with senior paediatricians to expand its services. As part of its plans for organic growth and to strengthen its position as a leading women’s and children’s healthcare provider, Thomson Medical will be establishing the Thomson Paediatric Centre (TPC) in a JV with two senior paediatric consultants to operate the Thomson Paediatric Centre, specialising in the management of children’s health. Previously, paediatric services at its hospital are provided by its tenant paediatricians. With this JV, Thomson Medical would be able to have a bite of the growing demand for paediatric services in Singapore and the region. TPC would also add to revenue growth going forward.

Patient admissions and baby deliveries expected to continue to improve. Thomson Medical continues to attract O&G specialists to set up clinics at its hospital. A senior O&G specialist will set up clinic at Thomson Medical in 3QFY10. With this, we expect the utilisation of its facilities to increase, thereby contributing to revenue growth. Coupled with its new resort-styled wards, we think that patient admissions (and in turn, baby deliveries) at Thomson Medical would increase as well.

Maintain BUY. We are maintaining our earnings estimate of S$14.2m for FY10. Our 12-month target price of S$0.78 is based on 16x FY10 earnings, a 20% discount to the larger industry players.