TMC Life posts lower 2Q earnings on higher staff cost

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KUALA LUMPUR (Jan 22): TMC Life Sciences Bhd saw its second financial quarter ended Nov 30, 2014 (2QFY15) net profit fell 3.9% to RM2.3 million, from RM2.4 million; despite revenue gone up 13% to RM25.1 million, from RM22.22 million a year ago.

Earnings per share (EPS) fell to 0.28 sen per share in 2QFY15, against 0.3 sen per share previously.

TMC Life operates the Tropicana Medical Centre. In a note to Bursa Malaysia today, the company attributed the marginally lower earnings in 2QFY15 to increased operating expenditure, especially on staff cost.

Nevertheless, TMC Life (fundamental: 2.2; valuation: 0.3) saw its first half net profit (1HFY15) jumped 49.3% to RM3.03 million, from RM2.03 million in 1HFY14; while revenue rose 17.7% to RM48.27 million.

1HFY15 EPS thus rose to 0.37 sen, from 0.25 sen previously.

TMC Life said the higher 1HFY15 revenue was due to higher patient load, thanks to increased bed capacity and additional consultants recruited in Tropicana Medical Centre.

Moving forward, TMC Life noted rising costs will remain a concern to private hospital operators. With a weaker ringgit, the cost of importing medical supplies and drugs will become higher.

TMC Life also mentioned it has to manage the Goods and Services Tax (GST) carefully, upon the latter’s implementation come April.

Nonetheless, the company said it will continue to expand the breadth of services through attracting medical, nursing and allied health talents.

The company, controlled by Singapore billionaire Peter Lim, has also recently announced a plan to invest up to RM300 million to expand the facilities at Tropicana Medical Centre in Kota Damansara, Petaling Jaya.

TMC Life closed half a sen or 0.8% higher at 63 sen today, with a market capitalisation of RM749.7 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to www.theedgemarkets.com for more details on a company's financial dashboard.)