Friday, August 8, 2008

Drop in US patients may trim Bumrungrad Hospital sales


Bumrungrad Hospital Plc (BH) says it is now unlikely to achieve 15% revenue growth as earlier projected, particularly because of the poor outlook for business from the United States.

Top-line growth is now expected to be around 6-8%, said an executive of the SET-listed private hospital, which leads the local market in terms of international patients.

BH last year served 430,000 international patients, 6.2% of whom came from the United States, its largest single foreign source market.The US economic slowdown and the fast-rising cost of long-haul travel are likely to cause some US customers to delay non-urgent medical treatment.

However, the executive said that overall international patient volume was still showing moderate growth and remained the most important driver for BH's revenues.

The growth is mainly supported by gains from the United Arab Emirates, Oman and Kuwait where high economic growth is being supported by record-high oil prices.

The company reported consolidated revenue from hospital operations of 8.32 billion baht last year, a 9% increase from 7.65 billion in 2006.

BH yesterday reported a net profit of 280 million baht in the second quarter, a 1% decline from 283 million in the same quarter last year. The drop was mainly due to a higher cost-to-revenue from the opening of the new Bumrungrad International Clinic on May 30, and seasonal effects of the travel industry's low season.

However total revenue for the quarter rose 4% to 2.19 billion baht, and first-half revenue increased to 4.42 billion from 4.24 billion, with first-half profits rising 3% year-on-year to 594 million baht.

According to Ayudhya Securities research, BH is expected to achieve sales of 9.16 billion baht this year, a rise from 8.32 billion in 2007, despite weaker earnings in the second quarter.

With the second half being the high travel season, the brokerage forecast a fully normalised profit of 1.21 billion baht, or growth of 8% year-on-year.

BH shares closed yesterday on the Stock Exchange of Thailand at 37.75 baht, up one baht, in trade worth 34.08 million baht.

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