KPJ Healthcare's 3Q net profit drops 63% y-o-y, says operating environment remains challenging

KPJ Healthcare's 3Q net profit drops 63% y-o-y, says operating environment remains challenging
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KUALA LUMPUR (Nov 26): KPJ Healthcare Bhd, whose net profit dropped 62.8% in the third quarter ended Sept 30, 2021 (3QFY21) to RM12.64 million from RM33.97 million a year ago, warns that it will continue operating in a challenging environment for the current quarter ending Dec 31.

The private healthcare group said the imposition of a series of lockdowns in the reported period due to the resurgence in the number of Covid-19 cases had significantly impacted the group’s operation.

This brought its earnings per share for 3QFY21 lower at 0.29 sen compared with 0.79 sen previously, according to its bourse filing.

Quarterly revenue, meanwhile, managed to grow 10.34% to RM698.96 million from RM633.44 million a year earlier, as patient visits increased to 782,732 from 736,255 previously.

Despite the earnings contraction, the group declared a 0.3 sen single-tier interim dividend per share for the financial year ending Dec 31, 2021. The dividend will be paid on Dec 28.

KPJ recorded total earnings before interest, taxes, depreciation and amortisation (EBITDA) of RM147.9 million, a 3% decline from RM152.2 million in the same quarter last year.

“The Malaysia segment recorded a total EBITDA of RM149.5 million, a decrease of 7% compared with RM160.7 million, while PBT recorded RM55.8 million, which declined by 26% from RM75 million last year.

“The decline is attributable to the increased costs at operations resulting from SOP compliance, however, is offset by [the] reversal of bonus in 2020, and top up with benefits received on the PRIHATIN Economic Stimulus Package and PENJANA Economic Recovery Plan,” the group explained.

On a quarterly basis, the group performed better compared with the preceding quarter.

KPJ’s 3QFY21 net profit jumped 81.6% from RM6.96 million in 2QFY21 contributed by higher revenue, EBITDA and PBT. “This represents an increase of EBITDA of 27% from RM116.9 million and a PBT increase of more than 100% from RM14.2 million in the previous quarter. In addition, the Group received rental rebates from Al-‘Aqar Healthcare REIT, which contributed to the better performance in the current period,” it said.

Quarterly revenue was 10.5% higher against RM632.83 million in the immediate preceding quarter.

For the cumulative nine months ended Sept 30, 2021 (9MFY21), KPJ’s net profit shrank 61.7% to RM32.57 million from RM85.16 million as 9MFY21 revenue increased by 9.2% to RM1.94 billion from RM1.77 billion in the previous year.

Moving forward, KPJ said it remains cautiously optimistic but will remain vigilant and focused on delivering its services while enhancing its cash position to ensure it remains resilient during these unprecedented times.

“As the healthcare ecosystem is being challenged to pivot, adapt and innovate quickly, our focus will be on more significant adoption of digital technology in our operations. The widespread use of telemedicine and virtual healthcare models during the pandemic has widened patients’ access to healthcare. This will continue to be a trend in the future that the group will continue to be focused on, but importantly, this has also allowed the group to push forward its digital transformation plan,” the group commented.

Furthermore, KPJ highlighted that it will continue deepening its public and private collaboration efforts, and this includes several initiatives to actively engage with the Ministry of Health in decanting patients to KPJ hospitals on a longer-term concession agreement to help manage the pressures in the public sector healthcare system while maximising utilisation of assets in the group.

KPJ’s share price fell four sen to RM1.05, with a market capitalisation of RM4.7 billion. The counter has fallen 13.22% from its peak of RM1.21 on Oct 1.

Kathy Fong