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Annual Report 2013
KPJ HEALTHCARE BERHAD
28
Statement to
Shareholders
TRAVERSING A TOUGH OPERATING
ENVIRONMENT
The global economy grew at a modest
2.9% in 2013 amidst an uneven growth
environment across economies. Despite the
weaker external environment, the Malaysian
economy expanded by 4.7% in 2013 (2012:
5.6%), driven by the continued strong growth
in domestic demand.
On the healthcare services front, competition
intensi ed due to continuously high
demand for quality private healthcare
services, competition from new hospitals
and competition for staff. The entry of
many healthcare service providers into the
Malaysian healthcare market led to a more
competitive environment. With a wide range
of hospitals to choose from, customers were
spoilt for choice.
At the same time, the domestic healthcare
sector bene tted from growth opportunities
in line with the catalyst activities being
implemented
under
the
Malaysian
Government’s Economic Transformation
Programme (ETP). The year saw more
investor-friendly policies being brought into
play as the Malaysian Government sought
to improve the competitiveness of domestic
service industries by introducing a variety of
incentives and programmes.
Healthcare service providers are encouraged
to adopt a patient-centric approach by
emphasising a shift from a “pay-for-service”
model to a “pay-per-outcome” model. There
was also a stronger focus on preventative
and promotive care, while Malaysia’s
health tourism sector saw strong growth
as healthcare service providers moved to
capitalise on this lucrative segment.
Going forward, as advancements in
healthcare technology for both practitioners
and patients reshape the way care is
delivered, healthcare players need to look
for ways to reinvent themselves as well as
continuously review how they can improve
their service delivery.
DELIVERING GOOD FINANCIAL
PERFORMANCE
Group Financial Highlights
We are pleased to report that the Group
turned in a healthy 11% growth in revenue
to RM2.33 billion in 2013 in comparison to
revenue of RM2.10 billion in 2012. This, KPJ’s
highest revenue to date, comes on the back
of organic growth as well as an increase in
income from newly completed projects and
acquisitions.
The Group’s pro t before zakat and tax
(PBZT), however, registered a 19% drop to
RM159.5 million as compared to a PBZT of
RM196.9 million in the preceding year. The
lower PBZT stemmed from start-up losses
of newly operating hospitals and higher
operating costs.
For 2013, the Group registered a marginal 25%
reduction in net pro t to RM110.4 million as
compared to net pro t of RM146.8 million in
the previous year.
Segmental Financial Highlights
The bulk of the Group’s 2013 revenue was
derived from the Malaysian operations which
contributed 88% of total revenue. Revenue
from local operations rose 9% year-on-year
(YoY) to RM2.054 billion from RM1.88 billion
previously on the back of higher revenue
from existing hospitals and newly opened
hospitals within the Group.
The Group’s hospitals in Indonesia continued
to make good progress, turning in a 52% hike
in revenue to RM33.5 million from RM22.1
million previously. This increase in revenue
was mainly attributable to the revenue
contributed by RS Medika Permata Hijau
during the nancial year.
The Aged Care Facility Services segment
recorded revenue of RM28.0 million in 2013,
some 9% lower than 2012’s revenue of RM30.8
million. The decrease in the revenue is due
to the reclassi cation of unrealised gains in
foreign exchange to other comprehensive
income.
Revenue from KPJ’s Ancillary Services
segment improved by 14.0% to RM780.0million
in 2013 from RM684.7 million previously. The
higher revenue was attributable to growth
in activities connected to the marketing and
distribution of pharmaceuticals, medical and
surgical products, as well as higher demand
for pathology and laboratory services. These
activities grew in tandem with the increased
revenue from the Group’s hospitals.
CREATING GOOD SHAREHOLDER VALUE
Dividend Payments
While the Group has never been committed to a
formal dividendpolicy, for thepast 16consecutive
quarters, it has been paying out a quarterly
dividend of between 45% and 50% of net pro t
to Shareholders. In respect of the nancial year
ended 31 December 2013, the Group declared
and paid the following interim payments: