“We are still looking at various options either from borrowings or corporate exercises. The total cost of the project is RM1.2 billion, excluding land cost,” group CFO Jimmy Wong told reporters at the groundbreaking ceremony of Tropicana Medical Centre’s new extension last Friday.
He said about 70-80% of the RM1.2 billion will be funded via a corporate exercise, which it has not determined yet, while the remainder will likely be funded via internal funds and bank borrowings.
The 4.14-acre Thomson Iskandar will be developed as part of the proposed Vantage Bay Healthcare City in Johor and will house the 500-bed Iskandariah Hospital and related health and wellness facilities.
“The hospital is only one portion of the development in Vantage Bay. There is the hospital with 500 beds and 400 medical suites. In the future there will also be health and wellness facilities and also space for healthcare education for both doctors and allied health professionals, and also research,” said group COO Wan Nadiah Wan Mohd Abdullah Yaakob.
She said the project is pending regulatory approvals and construction is expected to commence by year-end.
Meanwhile, the new extension at Tropicana Medical Centre in Kota Damansara will increase the hospital’s capacity to 600 beds from 200 beds currently. The RM300 million cost of the new block will be funded via internal funds and borrowings.
TMC Life Sciences has 6 acres of land in Kota Damansara, on which 1.6 acres is already occupied by the hospital and 2.4 acres allocated for the new block. Wan Nadiah said the remaining 2 acres could be used for future expansion but there are no concrete plans yet.
Construction of the new block will begin in October. Both the new block and the Iskandariah Hospital will be completed and operational in the second half of 2020.
According to Wong, the new block will contribute positively to its earnings before interest, tax, depreciation, and amortization (ebitda) and net profit.
“This is a brownfield expansion, so we expect this to contribute in the second year of operations, which is by 2022.
We expect a one-year adjustment period,” he said.
In terms of medical tourism, Wan Nadiah said it contributes about 10-15% to revenue and is mostly driven by fertility services.
“In Johor, the proportion will be slightly higher. There is no target set but I would expect something around 30% (contribution to revenue from medical tourism),” she added.
She said there are also plans to expand medical tourism for its non-fertility services.
For the third quarter ended May 31, 2017, the group reported a 10.52% increase in net profit to RM5.96 million from RM5.39 million a year ago while revenue rose 16.57% to RM40.69 million from RM34.91 million a year ago.
Its share price rose 4% to close at 78 sen last Friday, with a total of 787,000 shares traded. It has a market capitalization of RM1.29 billion.
— THE SUN