Jakarta. Siloam International Hospitals, the hospital operator arm of conglomerate Lippo Group, believes it can improve its profitability by expanding its units throughout a myriad of cities in Indonesia despite slowed performance in the first half of this year.
Siloam booked Rp 26.86 billion ($2 million) in net income in the first six months this year, a 61.2 percent decrease compared with the same period last year. However, revenue was recorded at Rp 2.75 trillion, a 7.8 percent increase compared to the same period last year at Rp 2.55 trillion.
"The weak performance [in the first half this year] was due to a lower volume of patients in Siloam Hospitals due to the long public holiday in the second quarter this year," Siloam International Hospitals president director Ketut Budi Wijaya said in a statement on Tuesday (03/10).
Meanwhile, Ketut said the company's increased revenue was boosted by an increased number of outpatient visits, as well as an increase in bed occupancy rates by 56 percent -- equivalent to 330 beds.
To boost the company's performance, Ketut said the management will expand Siloam's businesses through direct and indirect investments, including by constructing new hospitals and also the acquisition of other existing hospitals."
Siloam also plans to raise Rp 3.09 trillion by selling 352.2 million new shares, equivalent to 25 percent of its equity. The proceeds from that sale will be used for business expansion.
The company has set an offering price of Rp 9,500 per share.
The company will use the proceeds from selling its new shares to acquire and conduct asset purchases and capital expenditures. The company plans to operate 50 hospitals by 2019, up from a current 31 hospitals, which will be equipped with a 6,100 bed capacity.
The company also committed to providing health services access for users of universal health care services, locally known as BPJS Kesehatan. Currently, Siloam has 19 hospitals throughout the archipelago that serve BPJS Kesehatan cardholders.
As of Oct. 2, Siloam has Rp 13 trillion in market capitalization.