Parkway sees new hospital making profit by 2nd year

Q4 earnings grow 80% to $26.7m on 30% rise in revenue to $232.6m

HEALTHCARE provider Parkway Holdings expects a new hospital it will put up on a $1.25 billion site at Novena Terrace by 2011 to contribute to group earnings by its second year of operation, the company said yesterday.

For FY 2007 ended Dec 31, Parkway made a net profit of $298 million including exceptional items - a 439 per cent leap from $55.3 million the year before. Excluding exceptional items, net profit was $90.3 million, up 35 per cent from the $66.7 million in FY 2006.

Revenue for FY 2007 was $869.7 million, matching the previous year's $868 million. But this was largely attributable to the restructuring of its interest in Pantai Holdings Bhd - its healthcare unit in Malaysia - from a subsidiary to a joint-venture company in Q4 2006, which reduced Parkway's revenue and expenses in FY 2007 as a result of accounting changes.

Q4 2007 net profit grew 80 per cent year on year to $26.7 million, from $14.8 million previously. Q4 revenue was $232.6 million, up 30 per cent from $179.5 million previously.

Directors have declared a final tax-exempt dividend of 4.51 cents a share for 2007, bringing the payout for the year to 24.45 cents a share less tax. Earnings per share rose 31 per cent to 11.74 cents for the year.

Revenue from Singapore hospitals accounted for more than half of FY 2007 group revenue, while international hospitals and healthcare services contributed $402 million.

Parkway Holdings group president and CEO Lim Cheok Peng said: 'Foreign arrivals continue to grow. And there's an increased population base in Singapore with 1.2 million expatriates.'

Malaysia and Indonesia account for majority of foreign patients, but Parkway is looking to non-traditional markets such as the Middle East and Russia.

Parkway's winning bid for the 1.7 ha site at Novena - which works out to $1,600 per square foot per plot ratio - made the site the most expensive commercial land sale since 2006. Development cost is expected to be up to $500 million over three years. Medical equipment could cost a further $200 million, but the company may look at leasing this.

Source : Business Times - 28 Feb 2008