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THE economic downturn and the H1N1 flu outbreak have not dented Parkway Holdings' ambition to be a Pan-Asian healthcare player, as it lays plans to expand in Malaysia and China.
Over the next few years, it expects to operate a new hospital in Perak and is looking at setting up a hospital in Johor's Iskandar Development region.
A memorandum of understanding has been signed between subsidiary Pantai Holdings Bhd and YNH Property Bhd. The latter will build the Perak hospital and lease it to Pantai.
In China, where Parkway owns a 70 per cent stake in the World Link Group medical network and Gleneagles International Medical Center in Shanghai, Parkway is eyeing opportunities for a hospital project.
'At the moment, we are treating about 450-500 outpatients a day (in China),' said group president and CEO Lim Cheok Peng. 'The moment we hit, say, 1,000 outpatients a day, we should open a hospital, because roughly 30 per cent of outpatients end up in hospital for a procedure or investigation.'
The plans were revealed by Dr Lim yesterday after Parkway announced its latest financial results. The group posted a 42 per cent jump in Q2 earnings to $40.3 million, hugely boosted by a $17.2 million reversal of an allowance made for an impairment loss on receivables. The figure represents a 50 per cent recoupment of a $34.4 million provision that Parkway made in Q4 last year for unpaid fees from a group of patients backed by letters of guarantee from their employers.
Excluding exceptional items, Q2 net profit for the period ended June 30 climbed 8 per cent to $30.1 million. Revenue rose 10 per cent to $258.6 million.
While initial concern over H1N1 flu affected the inflow of foreign patients to Parkway's Singapore hospitals, this was more than offset by growth in its Parkway Shenton network and contributions from overseas hospitals. Revenue from Singapore hospitals fell 3 per cent to $117.3 million, while that from overseas hospitals jumped 33 per cent to $60.9 million. Revenue from Parkway's local primary care business went up 23 per cent to $44.6 million, boosted by a major government contract to conduct temperature screening at the borders. Overseas primary care business accounted for $34.3 million of revenue, 13 per cent up from last year.
The results took first-half earnings to $61.6 million, 29 per cent higher than last year. Revenue for the half-year rose 7 per cent to $496.3 million.
Parkway has $1.2 billion of debt, of which $36 million is repayable within a year. Basic earnings per share rose to 3.57 cents in Q2, from 3.11 cents previously. Net asset value rose to 1.24 cents a share, from 1.19 cents.
'Despite the group's strong performance in Q2, and in view of the uncertainty of how long the global economic downturn will last, we remain cautiously optimistic about the performance of the healthcare sector over the medium term,' Dr Lim said.
'We will continue to upgrade hospital facilities across all our markets as well as invest in the latest medical technology to ensure that ParkwayHealth patients receive the highest-quality medical care wherever they may be.'
The counter ended unchanged at $1.90 yesterday.
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