Pioneers in private healthcare in Sri Lanka, Nawaloka Hospitals PLC saw its group net profits falling by 21 percent to Rs.45.3 million or 3 cents from a year ago amid rising operating and finance costs, the interim results showed.
The cost of services rose by a moderate 8 percent year-on-year (yoy) to Rs.727.6 million while the total operating costs rose by 11.4 percent to Rs.613.5 million, faster than the growth in the top-line. The 30-year old hospital group made revenues of Rs.1.46 billion for the quarter, an increase of 7 percent from the same period last year. Sri Lanka’s demand for quality private healthcare is on the up because the country has one of the fastest growing aging populations in the world and rising incidence of non-communicable diseases (NCDs).
At the same time the per capita income is also rising giving Sri Lankans the wherewithal to spend at private hospitals.
According to the country’s health sector data, the number of private hospitals registered in Sri Lanka stood at 241 by end 2015 with a bed capacity of 5,883.
Nawaloka identifies the dietary and lifestyle changes as major causes for NCDs among Sri Lankans and it has increased demand for quality private sector healthcare
The increasing but worrying shift from organic food to fast-food by Sri Lankans due to both man and woman getting enmeshed in a never ending struggle to earn for the family has fast deteriorated their health and also has put the next generation too in jeopardy.
This has forced them to spend considerable amount of their income in private hospitals to fight high blood pressure, cholesterol and cancers for the rest of their lives.
A year ago Nawaloka opened another 75-bed hospital in Negombo under its fully owned subsidiary, Nawaloka Medicare (Pvt) Ltd.
Further, the authorities are also taking steps to promote the country as an attractive destination for medical tourism as Sri Lanka offers affordability and state-of-the-art technology through its highly qualified doctors.
Negombo hospital is aimed at medical tourism, the hospital sources claim.
Meanwhile, the finance cost rose by 14 percent yoy to Rs. 105.7 million as due to increase in loans and leases and the market interest rates.
For the financial year ended March 31, 2016, the Nawaloka group reported earnings of Rs.206 million or 15 cents a share, an increase of 136 percent.
On July 18, 2016 the company has paid a dividend of Rs.0.07 per share for 2014/15.
In March 2016 high net-worth investor, Dhammika Perera bought 22 percent stake in Nawaloka in a deal worth Rs.1.2 billion.
As of June 30, Perera held 24.77 percent stake being the third largest shareholder.
The Chairman and CEO, Jayantha Dharmadasa held 32.83 percent stake being the single largest shareholder of the group while Nawaloka Construction Company Limited held 31.34 percent stake being the second
The state-controlled private sector pension fund, Employees’ Provident Fund held 0.68 percent stake in the hospital being the fourth largest shareholder.