Is BH in a Coma…?

Is BH in a Coma...?

Is Bumrungrad Hospital Public Company Limited (BH) in a coma…!? After revealing a consolidated 2Q20 result, the net profit has collapsed to 44 million baht, representing a 93.9% decrease from 725 million baht in 2Q19.

This outcome have windly affected other health care services stokes, notably Bangkok Dusit Medical Services Public Company Limited (BDMS), as it put weight on investors’ sentiment.

The highly disruptive impact of COVID-19 pandemic is the key factor causing BH to be in coma as the country were placed in lockdown and travel bans in all international countries.

Resulting in a decline in the revenue contribution from foreign patients. Revenues from hospital operations decreased 43.4% to 2,422 million baht, comprised of a 58.9% shrink in revenues from non-Thai patients and a 13.0% drop in revenues from Thai patients.

As of result the revenue contribution from non-Thai patients was decreased to 48.1% from 66.2% year-on-year, whereas revenue from Thai patients was increased to 51.9% from 33.8% a year earlier.

Cost of hospital operations was 1,642 million baht for 2Q20, resulting in a 34.5% decrease year-over-year, mostly due to 427 million baht decrease in physicians’ fees; 195 million baht less supply costs; and 185 million baht decrease in personnel cost.

While selling expenses were 70 million baht in 2Q20, or 39.3% decrease year-over-year and administrative expenses were 725 million baht, or 11.6% decrease year-over-year.

Consequently, the net profit for first half operational performance decreased by 55.2% year-on-year to 810 million baht from 1,806 million baht in 1H19 and revenues from hospital operations was 6,513 million baht, representing a 27.1% decrease year-over-year from 8,929 baht million in 1H19. 

If the ongoing pandemic lasts longer and many countries remain in lockdowns, therefore 3Q20F of BH would continue be impacted. 

However, the share price of BH is something to be worried…since the beginning of 2020, the price has decreased more than 30%, as of August 7. 2020, the stock was closed at ฿109/share, the market capitalization as well shrank to 86,000 million baht, losing approx. 20,000 million baht.

Luckily for those investors, at least BH has generated an interim dividend of 1.15 baht.