Jakarta. Siloam International Hospitals, the largest listed hospital operator in Indonesia, has taken confidence from a positive financial performance last year to build on the quality of its health services and boost profitability.
Siloam's underlying net profit – which excludes one-off accounting events such as non-cash asset value adjustment – rose 251 percent to Rp 92 billion ($6.5 million) last year. Its revenue also rose 18 percent to Rp 7.02 trillion from Rp 5.96 trillion a year earlier.
The company's earnings before interest, taxes, depreciation and amortization (Ebitda) also rose 26 percent.
Siloam reported a 17 percent growth in the number of hospital patients and its bed occupancy ratio also rose to 64 percent from 55 percent in 2018.
Its revenue from the inpatient segment reached Rp 4.09 trillion, equivalent to 58 percent of the total revenue, and was up 16 percent from 2018's Rp 3.52 trillion.
The outpatient segment contributed the remainder of the revenue, growing 20 percent to Rp 2.93 trillion from Rp 2.44 trillion in 2018.
Siloam Hospitals Vice President Director Caroline Riady said the management's decision to implement an accounting review that resulted in the adjustment of account receivables and termination of several new projects has been vindicated by an overwhelmingly positive reaction from investors.
Siloam's share price has risen 30 percent from its one-year low in March to trade at Rp 5,550 per share on Friday.
"Going forward, Siloam will focus on improving the quality of its health services and hospital profitability," Caroline said in a statement.
Siloam had strong cash flow last year. Operating cash flow increased 220 percent to Rp 652 billion, helping the company to post a positive free cash flow of Rp 184 billion.
In 2018, the company saw a negative free cash flow of Rp 595 billion.
Its total cash in December 2019 rounded up to Rp 314 billion, up 45 percent compared to 2018's Rp 216 billion.
Siloam now has a strong financial standing with a low debt to equity ratio of 0.05.
"A strong cash position provides a solid operational foundation for Siloam," Caroline said.
Siloam's strategy before 2019 was to grow in terms of scale by building the largest hospital network in Indonesia.
After achieving the goal in 2019, the company has now shifted its focus on building strong centers of excellence in each hospital to boost the assets' ability to generate income.
"Our management has prepared a strong foundation for future growth. Siloam will continue to take action to overcome challenges amid the Covid-19 pandemic," Caroline said.
Siloam had total assets of Rp 7.74 trillion, up 0.7 percent compared to Rp 7.69 trillion in 2018. Its liabilities also increased by 27 percent to Rp 1.75 trillion.