KPJ Healthcare Berhad

KPJ Healthcare plans to conclude two acquisitions by year-end

KPJ Healthcare Bhd, which is on an aggressive expansion plan, hopes to conclude two acquisitions by year-end, said managing director Datin Paduka Siti Sa'diah Sheikh Bakir

KUALA LUMPUR: KPJ Healthcare Bhd, which is on an aggressive expansion plan, hopes to conclude two acquisitions by year-end, said managing director Datin Paduka Siti Sa'diah Sheikh Bakir

“There are offers which we are assessing both locally and internationally. We hope to conclude at least one local acquisition and one overseas by year-end,” Siti Sa'diah told StarBiz in an interview.

However, she did not reveal the size of the acquisitions. She said KPJ had been looking for potential acquisitions continuously. ”We're ready for two acquisitions a year and also to build two hospitals a year.” To a question, Siti Sa'diah said KPJ was keen on acquiring operational hospitals. “We are keen on acquisition... not greenfield. We are more interested in Asean than any other parts of the world. We had learning curves from Dhaka, Bangladesh and some experience in Bangkok so we know what the markets are like.”

Separately, she said local standalone hospitals were also its potential acquisition targets. She said these standalone hospitals could leverage on KPJ's extensive network as well as cost savings benefits as training and procurement would be centralised.

KPJ currently has 21 hospitals locally, two hospitals in Indonesia and an age-care facility in Australia.

Last month, Siti Sa'diah said KPJ would be investing more than RM1bil to set up nine more hospitals throughout the country in its effort to widen its healthcare services.

The nine projects are at different stages of development and they include the five projects listed under the healthcare sector of the Economic Transformation Programme (ETP).

The five projects announced in the ETP will involve initial investments of about RM760mil and will add a total 822 beds to KPJ's existing bed capacity of more than 2,600.

Siti Sa'diah said the development of new hospitals was in various stages. “We're currently assessing the bidders for the hospital tender in Pahang. The Perlis hospital will be tendered out soon. We're also waiting for plan approval for Johor Baru's Bandar Dato Onn hospital.”

Despite its rapid expansion plan, KPJ did not need to raise any cash at the moment, Siti Sa'diah said, adding that it had existing commercial papers and medium-term notes of RM250mil which it could utilised. She said the group's model of being asset-light by injecting its building and land into Al-'Aqar KPJ REIT also helped to unlock its value.

On its capital expenditure, Siti Sa'diah said KPJ spent about RM200mil on hospitals and a further RM100mil-RM150mil on hospital equipment per annum. “We're constantly upgrading the business.”

She sees KPJ registering a 10%-15% growth in revenue this year as it had been in the past. “KPJ grows around 10% to 15% annually.”

Last year, KPJ's net profit grew 10.8% to RM131.7mil while its revenue increased 14.5% to RM1.89bil.

Separately, Siti Sa'diah said she had put in a good management team that could take the group to greater heights.

“Even if I am not in, the people we have will be able to run the hospitals. I've trained many. My management team is superb.”