TDM returns to profit in 1Q on improved plantation, healthcare businesses

KUALA LUMPUR (May 30): TDM Bhd registered a net profit of RM9.71 million for the first quarter ended March 31, 2022 (1QFY22) against a net loss of RM4.22 million a year earlier, as its plantation and healthcare businesses posted stronger contributions.

Group revenue jumped 39.79% year-on-year to RM143.67 million from RM102.77 million, its filing with Bursa Malaysia showed.

“Higher revenue from the plantation division was mainly driven by higher average crude palm oil (CPO) and palm kernel (PK) prices of 51% and 83%, respectively. Meanwhile, the positive revenue growth from TDM’s healthcare division was contributed by a recovering occupancy rate of 18% and higher numbers of inpatients and outpatients by 17% and 6%, respectively,” TDM said.

The group recorded an earnings per share of 0.56 sen, versus a loss per share of 0.24 sen in the previous year. No dividends were declared. The group's earnings before interest, tax, depreciation and amortization (EBITDA) improved to RM40.8 million from RM23.3 million previously.

According to TDM, CPO prices will continue to be influenced by palm oil and other edible oil productions, palm oil demand — mainly from India, China and the European Union (EU) — fertiliser cost, changes in trade policies in Indonesia and India, crude oil prices, and weather conditions in major production regions.

On another note, it said the transition into endemicity and relaxation of several Covid-19 standard operating procedures are expected to further boost healthcare spending, as the population feels safer seeking treatment in hospitals.

The group’s healthcare segment owns five community specialist hospitals, namely: KMI Kelana Jaya Medical Centre, Petaling Jaya, Selangor, KMI Kuantan Medical Centre, Kuantan, Pahang, KMI Kuala Terengganu Medical Centre, Kuala Terengganu, KMI Taman Desa Medical Centre, Kuala Lumpur and KMI Tawau Medical Centre, Sabah.

“Nonetheless, the challenge to navigate the rising costs due to the global supply chain disruptions and weaker ringgit remains with the group for the next quarters. Initiatives are being made to minimise the cost pass-through to patients in order to stay competitive and affordable to the people at large.

“The probable interest rate hike, which has remained unchanged since 2020, will add up to the challenge of maintaining [a] good operational margin.

“On the other hand, collaborations with other major hospital entities on specific healthcare services are at exploratory stages. The move is anticipated to benefit TDM’s image and uplift its brand awareness,” TDM added.

As at 3.51pm on Monday (May 30), TDM shares were down half a sen or 1.79% at 27.5 sen. This gave the company a market value of RM473.39 million. The counter has risen 19.57% year-to-date from 23 sen.