Property developer Aseana Properties Limited is putting its stakes at the City International Hospital (CIH) in Ho Chi Minh City up for sale, as the hospital has continuously made losses since it commenced business in 2014.
CIH is one of the six hospitals developed within the Hi-tech Healthcare Park initiated by Hoa Lam-Shangri-La Healthcare Limited Liability Company, a joint venture established by Vietnam’s Hoa Lam Services Co. Ltd. and Singapore’s Shangri-La Healthcare Investment Pte. Ltd. in 2008. Aseana has a 51 per cent holding in the joint venture and 72.41 per cent ownership in the healthcare park.
According to Aseana’s full year results for the year ended December 2018, the company reported a net loss before taxation of $6.8 million due to the rising finance costs of $7 million attributable to CIH, Hi-tech Healthcare Park and some other investments in Malaysia, as well as the operating losses at CIH and other.
Aseana has entered into an agreement to divest a plot of land at the healthcare park (Lot PT2) for approximately $6.6 million, completion of which is still subject to local regulatory approval. In addition, it has planned for the sale of stakes at both CIH and Hi-tech Healthcare Park in the second quarter of 2019. According to Aseana, the company has appointed an international advisory firm to conduct a divestment process for CIH. This will consolidate and streamline the various ongoing discussions with potential buyers
Aseana reported CIH’s operational performance for the year ended 2018 with a 21.6 per cent increase in outpatient volume and 22.4 per cent increase in inpatient volume compared to 2017. The operation of the angiographic intervention service since the end of April 2018 has contributed to the overall increase inpatient volume of the hospital.
CIH had the average revenue per inpatient day of $529 (2018: $383) and per outpatient visit of $78 (2018: $71) as at the end of February, 2019.
Despite promising operational performance and growing revenue (which advanced from $4.2 million in 2015 to $12.7 million in 2018), CIH operating expenses had added up accordingly, us leaving the hospital in accumulated losses over the years.
Last year, CIH reported a loss of $1.9 million, which attributed to the rising finance costs with debts amounting to $41 million by the end of 2018.
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