Ref: SET 64/07

11 August 2021

Subject: Management Discussion and Analysis for the second quarter 2021 and the first half 2021results

To:

Directors and Manager

The Stock Exchange of Thailand

Bumrungrad Hospital PCL.

Management Discussion and Analysis for Consolidated 2Q21 and 1H21 results

11 August 2021

Summary

The Company reported Total revenues in 2Q21 of Baht 3,020 million. This amount represented a 23.2% increase from 2Q20 total revenues of Baht 2,452 million. Net profit for 2Q21 increased by 387.2% to Baht 216 million from Baht 44 million in 2Q20, with Net profit margin at 7.2% in 2Q21, compared to 1.8% in 2Q20.

2Q21 performance improved from 1Q21, primarily due to the increase in revenues from Thai, expat and international patients from Alternative Hospital Quarantine (AHQ) service. Total revenues for 2Q21 increased by 12.7% from 1Q21, while 2Q21 Net profit grew 137.5% from 1Q21.

Total revenues for 1H21 decreased to Baht 5,694 million, or 13.5% less than Baht 6,586 million in 1H20. Net profit for 1H21 decreased by 62.0% to Baht 308 million from Baht 810 million in 1H20, with Net profit margin at 5.4% in 1H21 compared to 12.3% in 1H20. The decrease was mostly attributed to the limited impact of COVID-19 during 1Q2020.

Despite the surge in COVID-19 cases in Thailand in mid-December 2020 and continuing into 2021, the Thai and expat business continued to grow year-on-year. Restrictions on travel and medical tourism, continues to impact the Company's international business, especially when compared to the high base of the first half of the first quarter of the previous year, when COVID-19 was only marginally impacting the Company's performance.

Details of the management discussion and analysis follow:

Income statements

Quarterly Operational Performance 2Q21 vs 2Q20 (YoY Comparison)

The Company reported Revenues from hospital operations of Baht 2,980 million, a 23.0% increase year-over-year from Baht 2,422 million in 2Q20. This was mostly due to an increase in revenues from Thai patients and non-Thai patients by 27.3% and 18.5%, respectively. As a result, the revenue contribution from Thai patients was 53.6%, whereas revenue from non-Thai patients was 46.4% for 2Q21 compared with 51.8% and 48.2%, respectively, for 2Q20.

Page 1 of 6

Operating Expenses and EBITDA

(Unit: Baht million)

2Q21

2Q20

Change

Cost of hospital operations

1,905

1,642

-16.1%

Selling expenses

94

70

-33.3%

Administrative expenses

741

725

-2.3%

EBITDA

576

317

81.7%

EBITDA Margin

19.1%

12.9%

The Company reported Cost of hospital operations (including Depreciation and amortization) of Baht 1,905 million for 2Q21, resulting in a 16.1% increase year-over-year from Baht 1,642 million in 2Q20. The variance was mostly due to Baht 130 million increase in physicians' fees; Baht 86 million increase in supply costs; and Baht 30 million increase in personnel cost. This represented a favorable change when compared to the 23.0% increase in Revenues from hospital operations, and contributed to a reduction in the percentage of cost to Revenues from hospital operations to 63.9% in 2Q21 compared with 67.8% in 2Q20.

Selling expenses (including Depreciation and amortization) were Baht 94 million in 2Q21, or 33.3% increase year-over-year from Baht 70 million in 2Q20. The variance was mostly due to Baht 13 million increase in marketing expenses.

Administrative expenses (including Depreciation and amortization) were Baht 741 million in 2Q21, or 2.3% increase year-over-year from Baht 725 million in 2Q20. The variance was mostly due to Baht 12 million increase in credit card commissions, which was in line with the increase in Revenues from hospital operations.

EBITDA increased by 81.7% year-over-year to Baht 576 million in 2Q21 from Baht 317 million in 2Q20, with an EBITDA margin of 19.1% in 2Q21 compared to 12.9% in 2Q20.

Depreciation and amortization were Baht 296 million in 2Q21, compared to Baht 305 million in 2Q20.

Corporate income tax expense was Baht 38 million in 2Q21 compared to a corporate income tax credit of Baht 32 million in 2Q20. The variance was mostly due to the increase in taxable operating profit.

Basic EPS was Baht 0.27 in 2Q21, compared to Baht 0.06 in 2Q20, while 2Q21 Diluted EPS was Baht 0.25, compared to Baht 0.05 in 2Q20.

2Q21 vs 1Q21 (QoQ Comparison)

2Q21 Revenues from hospital operations increased by 12.8% from 1Q21. This was mostly due to an increase in revenues from non-Thai patients and Thai patients by 13.6% and 12.1%, respectively. As a result, the revenue contribution from Thai patients was 53.6%, whereas revenue from non-Thai patients was 46.4% for 2Q21 compared with 53.9% and 46.1%, respectively, for 1Q21.

As a result of the increase in revenues as noted above, 2Q21 EBITDA increase by 40.4% from 1Q21, with an EBITDA margin of 19.1% in 2Q21 compared to 15.3% in 1Q21.

Page 2 of 6

Income statements

(Unit: Baht million)

2Q21

2Q20

Change

1Q21

Change

Revenues from hospital operations

2,980

2,422

23.0%

2,642

12.8%

Total revenues

3,020

2,452

23.2 %

2,679

12.7%

EBITDA

576

317

81.7%

410

40.4%

Net profit

216

44

387.2%

91

137.5%

EBITDA margin

19.1%

12.9%

15.3%

Net profit margin

7.2%

1.8%

3.4%

EPS

(Unit: Baht)

2Q21

2Q20

Change

1Q21

Change

EPS - Basic

0.27

0.06

387.2%

0.11

137.5%

EPS - Fully Diluted

0.25

0.05

387.2%

0.11

137.5%

First Half Operational Performance 1H21 vs 1H20 (YoY Comparison)

The Company reported Revenues from hospital operations of Baht 5,622 million, a 13.7% decrease year-over-year from Baht 6,513 million in 1H20. This was mostly due to a decrease in revenues from non-Thai patients by 32.3%, offset with an increase from Thai patients by 13.1%. As a result, the revenue contribution from Thai patients was 53.7%, whereas revenue from non-Thai patients was 46.3% for 1H21 compared with 41.0% and 59.0%, respectively, for 1H20.

Operating Expenses and EBITDA

(Unit: Baht million)

1H21

1H20

Change

Cost of hospital operations

3,653

3,939

7.3%

Selling expenses

172

164

-4.9%

Administrative expenses

1,475

1,544

4.5%

EBITDA

986

1,555

-36.6%

EBITDA Margin

17.3%

23.6%

The Company reported Cost of hospital operations (including Depreciation and amortization) of Baht 3,653 million for 1H21, resulting in a 7.3% decrease year-over-year from Baht 3,939 million in 1H20. The variance was mostly due to Baht 125 million decrease in physicians' fees; Baht 73 million decrease in personnel cost; and Baht 71 million decrease in supply costs. These variances were mostly in line with the decrease in Revenues from hospital operations. This contributed to the percentage of cost to Revenues from hospital operations of 65.0% in 1H21 compared with 60.5% in 1H20.

Selling expenses (including Depreciation and amortization) were Baht 172 million in 1H21, or 4.9% increase year-over-year from Baht 164 million in 1H20. The variance was mostly due to software subscription fees and IT related expenses for the digital platform expansion.

Administrative expenses (including Depreciation and amortization) were Baht 1,475 million in 1H21, or 4.5% decrease year-over-year from Baht 1,544 million in 1H20. The variance was mostly due to Baht 39 million decrease in software support and maintenance; and Baht 18 million decrease in consulting fee.

Page 3 of 6

EBITDA decreased by 36.6% year-over-year to Baht 986 million in 1H21 from Baht 1,555 million in 1H20, with an EBITDA margin of 17.3% in 1H21 compared to 23.6% in 1H20.

Depreciation and amortization were Baht 594 million in 1H21, compared to Baht 617 million in 1H20.

Corporate income tax was Baht 50 million in 1H21 compared to Baht 134 million in 1H20. The variance was mostly due to the decrease in taxable operating profit.

Basic EPS was Baht 0.39 in 1H21, compared to Baht 1.05 in 1H20, while 1H21 Diluted EPS was Baht 0.35, compared to Baht 0.93 in 1H20.

Income statements

(Unit: Baht million)

1H21

1H20

Change

Revenues from hospital operations

5,622

6,513

-13.7%

Total revenues

5,694

6,586

-13.5%

EBITDA

986

1,555

-36.6%

Net profit

308

810

-62.0%

EBITDA margin

17.3%

23.6%

Net profit margin

5.4%

12.3%

EPS

(Unit: Baht)

1H21

1H20

Change

EPS - Basic

0.39

1.05

-63.3%

EPS - Fully Diluted

0.35

0.93

-62.0%

Statements of financial position

As at 30 June 2021, the Company reported Total current assets of Baht 10,102 million, a decrease from Baht 10,801 million as at 31 December 2020. The variance was mostly due to a net decrease of Baht 203 million in Cash and cash equivalents and Other current financial assets, and a decrease of Baht 491 million in Trade and other receivables. The collection period was 69.7 days as at 30 June 2021 compared to 78.8 days as at 31 December 2020, mostly due to shorter collection periods associated with certain Middle East accounts. The collection period remains under the Company's overall credit term policy of 30-90 days.

Total non-current assets decreased to Baht 13,018 million as at 30 June 2021 from Baht 13,421 million as at 31 December 2020, mostly due to Baht 323 million net reclassification of Other non-current financial assets to Other current financial assets.

Total current liabilities were Baht 4,572 million as at 30 June 2021, an increase from Baht 4,418 million as at 31 December 2020.This was primarily due to an increase of Baht 92 million in Other current liabilities; Baht 72 million in Trade and other payables; and Baht 33 million in Corporate income tax payables, being partially offset by Baht 60 million less Accrued physician fee.

Non-current liabilities were Baht 1,023 million as at 30 June 2021, an increase from Baht 967 million as at 31 December 2020. The variance was mostly due to Baht 58 million additional Provision for long-term employee benefits.

Page 4 of 6

The Company's Interest coverage ratio was 15.1x in 1H21 compared to 23.7x in 1H20, due to the decrease in EBITDA.

Total shareholders' equity was Baht 17,526 million as at 30 June 2021, compared to Baht 18,837 million as at 31 December 2020. This variance was mostly from dividend distribution of Baht 1,631 million, offset with the Company's 1H21 Net profit of Baht 308 million. Average return on assets (ROA) was 2.6% in 1H21, compared to 4.8% in 2020. Average return on equity (ROE) was 3.4% in 1H21, compared to 6.2% in 2020.

Unit: Baht million

30-Jun-21

31-Dec-20

Change

Total assets

23,121

24,222

-4.5%

Total liabilities

5,595

5,385

3.9%

Total shareholders' equity

17,526

18,837

-7.0%

1H21

1H20

Interest coverage ratio (x)

15.1*

23.7*

  • After adding back the 1H21 and 1H20 capitalized interest expenses related to the campus expansion.

1H21

2020

Average collection period (days)

69.7

78.8

Average inventory period (days)

15.6

16.5

Average payables period (days)

29.5

32.7

Net debt to equity (x)

0.1

0.1

Net debt to EBITDA (x)

0.6

0.5

Average return on assets (%)

2.6%

4.8%

Average return on equity (%)

3.4%

6.2%

Cash flow statements

The Company's Net cash flows from operating activities in 1H21 were Baht 1,572 million, compared to Baht 676 million in 1H20. This increase was mainly due to Baht 516 million decrease in Trade and other receivables, and Baht 370 million decrease in cash paid for corporate income tax. Net cash flows from investment activities were Baht 396 million in 1H21, compared to Baht 775 million in 1H20. This variance was mainly due to Baht 395 million net decrease in investments in fixed deposit and debt securities, and Baht 47 million decrease in acquisition of PP&E and computer software. The Company reported Net cash flows used in financing activities of Baht 1,742 million in 1H21, compared to Baht 1,726 million in 1H20. As a result of the above, Cash and cash equivalents was Baht 1,470 million as at 30 June 2021, compared to Baht 1,800 million as at 30 June 2020.

The Company's Liquidity ratio as at 30 June 2021 was 2.2x compared to 2.4x as at 31 December 2020, and the Company's Quick ratio was 0.7x as at 30 June 2021 compared to 0.8x as at 31 December 2020.

Page 5 of 6

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original document
  • Permalink

Disclaimer

Bumrungrad Hospital pcl published this content on 13 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 August 2021 01:10:05 UTC.