KUCHING: TMC Life Sciences Bhd (TMC) is expected to raise awareness of its new medical centre in order to boost its profitability.
BUSINESS TURNAROUND: TMC Life Sciences provides awareness about its medical centers through doctors’ television interviews and talks.
TMC is expected to do so by featuring its doctors on television interviews and health talks for targeted groups.
OSK Research Sdn Bhd (OSK Research) said that TMC was also focusing on developing strategic partnerships and alliances such as the partnering with local and international insurance companies and third-party administrators for inclusion on panel of approved hospitals.
The company was also collaborating with various organisations for specific promotions.
On the other hand, it was reported that TMC would continue to expand the number of services offered by the Tropicana Medical Centre. These services were magnetic resonance imaging (MRI) cardiac, neurology, pediatric surgery, psychology, plastic surgery, vascular surgery and gynae-oncology.
Although the gestation period of running Tropicana was stretched to more than six months longer than the initial expectation, operating statistics of the medical centre was improving.
The number of patients and average revenue per patient was increasing for the last three quarters. There were currently 58 doctors based on the medical centre compared to 49 doctors during the first half of 2009.
Furthermore, the hospital continued to open up more in-patient beds, rising from only 21 beds in January 2009 to 75 beds this month. It was expected that there would be an additional twelve more specialist clinics by mid-2010.
On the other hand, the company wanted to enter into agreements with foreign companies to provide stem cell therapy.
TMC’s stem cell business would be able to leverage on its steady rise in delivery census of the new hospital in which the company had begun to provide stem cell therapy for the knee and was working with a foreign company to provide stem cell therapy for other conditions.
However, the stem cell business was expecting low contribution at least for the next two years due to pricing competition in the local market and limited stem cell therapies. The stem cell business contributed 1.2 per cent of the 2010 sales.
Reporting on the financial performance of the company, AmResearch said that TMC recorded its first net loss last year mainly due to the high start-up expenses incurred on the opening of the new Tropicana.
Due to the same reason, in 2008, TMC also recorded negative earnings growth for the first time since the year 2001.
In 2009, depreciation increased by nearly 400 per cent from RM1.5 million while net finance costs jumped by about 300 per cent from RM0.4 million to RM1.7 million.
Looking forward, based on management guidance, TMC would return to profitability in the current financial year at the back of rising hospital sales over the last three quarters.
With stable operating costs, the research house expected the earnings forecasts for 2010 to be RM5.8 million. Also, the traditional high-margin fertility services would contribute more as the world economy was improving.
The increase in the number of doctors and services would be able to continue to bring on more patient load. Should the operating expenses stay at the last three quarters level, TMC would be able to start generating profit from the Tropicana Medical Centre.
The research firm stated that TMC would continue to maintain the dividend payout since its initial public offer in 2005 with 0.3 sen single-tier first and final dividend being already declared in 2009. As a result, TMC’s value was pegged at RM0.34 per share.