Fertility biz a fertile source of revenue for TMC Life Sciences
Contribution to rise to 30% in FY20, growth in this segment is higher than that of its hospital operations
PETALING JAYA: TMC Life Sciences Bhd expects its fertility business to contribute 30% to the group’s revenue in the financial year ending June 30, 2020 (FY20), from 17% in FY19.
Group CEO Wan Nadiah Wan Mohd Abdullah Yaakob said it has seen a double-digit increase in its fertility business while its fertility branches in Penang, Ipoh and Johor Baru continue to grow well.
“This year we can see the stronger growth from fertility revenue because we’ve been offering packages across our branches. Growth in fertility revenue is higher than hospital revenue. Our growth in fertility (business) is more than 5% of the hospital revenue,” group CFO Jimmy Wong Yu Chee explained at a press conference after its AGM yesterday.
Nadiah said the profitability for the fertility business is higher than its hospital services, estimating that net profit contribution from the fertility business may reach 40% beyond FY21.
“When the Puchong fertility centre opens by the first half of this year, we also expect it to contribute positively to the bottom line,“she added.
Due to the Covid-19 outbreak, Nadiah said the fertility business has seen deferments or cancellations of appointments by patients from China, but the group has made that up by focusing more on the local market and patients from other countries such as Indonesia.
For hospital services, she said it has received more people who are concerned and coming to the hospital for check-ups.
“We see the numbers in the health screening centres dramatically increase so overall hospital (business) has been good. We can’t quantify the percentage but the numbers for the hospital continue to look healthy. At least we don’t see a dip. It (Covid-19) has not negatively impacted us.”
Its hospital services will remain the major revenue contributor, which is expected to make up the remaining 70% of the group’s revenue in FY20, from 83% in FY19.
The group has anticipated a 10% increase in its operating expenses for FY21 with the expansion of its flagship Thomson Hospital Kota Damansara, which is expected to be completed by the first half of next year with its first 200 beds in the first phase. In two to three years, it will have a total of 600 new beds.
The group has earmarked RM183.7 million for the expansion projects at Kota Damansara and Thomson Iskandar Medical Hub for FY21, in addition to the recurring capex of RM25.6 million.
However, Nadiah said the group’s revenue will continue to increase as it is seeing more and more complex cases, translating to higher bills from inpatients. Some of the new services that it has introduced includes acute stroke management, cardiothorasic and electrophysiology that will enable it to serve more patients and get referrals from other smaller hospitals.