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HEALTH Management International's (HMI) net profit stayed flat in its second fiscal quarter as higher administrative costs and income tax expenses offset revenue growth.
Net profit for the three months ended December 2015 gained one per cent to RM5.4 million (S$1.8 million), or 0.93 sen per share, the hospital operator announced on Thursday after the market closed. For the six-month period, net profit fell 44 per cent to RM6.8 million, or 1.17 sen per share.
Revenue rose 13 per cent to RM96.6 million during the quarter, largely due to higher patient load and average bill sizes in its Mahkota Medical Centre and Regency Specialist Hospital hospitals.
Gross profit margin improved to 31.7 per cent from 31.4 per cent as a result of better cost management, the company said. But administrative expenses grew by 34 per cent to RM14.9 million on the back of higher general operating costs, depreciation and share-based payment expenses. Tax expense also increased by 64 per cent to RM5.1 million due to utilisation of RM1.4 million of deferred tax assets by the Regency.
HMI said that it is upgrading and expanding its hospitals in Malaysia in anticipation of growing medical tourism business in the country. Construction of a 10-storey medical block at the Regency is expected to begin this year and will take two years to complete; the estimated investment cost of RM90 million will be funded by external debt and internal cash resources.
The company's directors are "cautiously optimistic" about the group's performance in the current fiscal year.