Friday, May 24, 2013

KPJ and IHH...........buy, sell or hold?

let me get more details into the stocks before making any conclusions.

KPJ Healthcare Q1 earnings down 24.7% to RM25m

By Nadya Ngui


KUALA LUMPUR: KPJ Healthcare Bhd's net profit fell 24.7% to RM25.09mil in the first quarter ended March 31, 2013 from RM33.3mil a year ago due to losses sustained by the group's newly opened hospitals.
It said on Wednesday its topline however increased 4% to RM545mil from RM525.6mil a year ago due to higher revenue from its new and existing hospitals.
Earnings per share declined to 4.29 sen from 5.81 sen a year ago. The group declared a dividend of two sen a share and the ex date was June 26.
KPJ Healthcare said its local revenue increased 2% to RM491.6 while its Indonesian operations posted a 38% increase to RM6.9mil compared to a year ago.
It said RM10mil was included in the preceding quarter as a result of gain on disposal of shares in Al-'Aqar Healthcare REIT and gain on revaluation of Investment Properties.
KPJ, however, was optimistic on the growth driven by the launch of its four new hospitals -- KPJ Sabah Specialist Hospital, Pasir Gudang Specialist Hospital, Maharani Specialist Hospital and Rawang Specialist Hospital.
"The expansion of existing hospitals will have a positive impact to the Group results for 2013, however this will be moderated by the new greenfield hospitals where each of this hospital will have an average gestation period between three to five years," it said.


IHH first-quarter profit improves on higher revenue

By DANIEL KHOO
danielkhoo@thestar.com.my

PETALING JAYA: IHH Healthcare Bhd recorded a higher net profit of RM127.27mil for the first quarter ended March 31, 2013, up 3.7% from RM122.71 in the same quarter last year.

The healthcare services provider said in its Bursa Malaysia announcement yesterday that revenue was higher almost 30% year-on-year to RM1.62bil in the first quarter. “We are quite happy with our financial performance,” said its executive director of corporate services Ahmad Shahizam Mohd Shariff over a conference call with journalists yesterday.
Ahmad Shahizam said that the reported numbers have been reclassified due to the consolidation of ParkwayLife Real Estate Investment Trust (PLife REIT) in both the first quarter of financial year 2013 and the corresponding period last year. IHH said in their statement that the group adopted the Malaysian financial reporting standards (MFRS10) consolidated financial statements effective from Jan 1, 2013 which resulted in PLife REIT being reclassified from an associate to subsidiary and Khubchandani Hospital Private Limited reclassified from a subsidiary to a joint venture.
“Consequentially, PLife REIT was retrospectively consolidated whilst Khubchandani was retrospectively equity accounted,” the statement added.
Excluding these effects, IHH said its profit after tax and minority interests (PATMI) increased by a modest 3% yoy to RM113.7mil from RM110.1mil while group PATMI excluding exceptional items rose by 18% to RM119.9mil.
This, it said, will more accurately reflect the underlying performance of its healthcare business.
“This was a result of the growth in earnings before interest, taxes, depreciation and amortisatin (EBITDA) and savings in financing costs after the repayment of Parkway and Acibadem acquisition loans from the utilisation of the initial public offering proceeds, which also offset the incremental depreciation cost and financing cost relating to new hospitals,” IHH said.
On its outlook, IHH said its patient volume and revenue in home markets were expected to grow with the ramping up of new hospitals and the completion of various expansion projects.
It noted profitability may be affected by start-up costs, depreciation and financial costs associated with these new operations.
“IHH is also mindful that the industry-wide shortage of trained healthcare professionals in Singapore, Malaysia and Turkey and the general trend of rising operating costs and lease rental expenses could dampen the overall EBITDA and margins,” the company said.
Meanwhile, IHH said its Gleneagles Hong Kong Hospital was expected to commence operations in late 2016 with a full range of clinical services. “The development is expected to involve a capital investment of approximately HKD5bil, which is inclusive of land costs amounting to HKD1.688bil paid in April 2013,” IHH said.

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