MRI_scan3.14A MRI scan produces images to help in the diagnosis of conditions ranging from back problems to brain tumours. A scan costs about S$700 on average.
Photo: Company.
The number of patients referred to AsiaMedic's centre in Shaw House, Orchard Road, for Magnetic Resonance Imaging (MRI) scans is headed strongly upward.

Last year, the number of filled slots of MRI machine time (half an hour per slot) was 28-30 on average a day.

It has jumped to about 40 this year following the installation of a third MRI scanner at end-2013, said AsiaMedic's CEO, Dr Wong Weng Hong, in a recent meeting with NextInsight and several investors.

He said he is confident that 50 filled slots a day could become the norm from later this year, as AsiaMedic plans to make MRI scans available after office hours to cater to patients who see their doctors in the afternoon and are subsequently referred to AsiaMedic.

MRI scans are a major part of AsiaMedic's business.

Its 2 MRI scanners contributed about half of the revenue of $9.8 million attributable to its radiology services last year. 

asiamedic.wongwenghongAsiaMedic CEO Dr Wong Weng Hong.
NextInsight file photo
Other radiology services include PET (Positron Emission Tomography), CT (Computed Tomography), general X-ray, mammography and ultra-sound scans.

In turn, the $9.8 million revenue from radiology services made up 67% of the $14.7 million of revenue of the AsiaMedic group last year.

Why the rising number of MRI scans at AsiaMedic?

Dr Wong explained that there is a limited number of scanners in the Orchard Road area. For example, Gleneagles Hospital has 1 (for outpatients), Mt Elizabeth Hospital, 3, RadLink, 3, and AsiaHealth Partners, 1.

Demand is exceeding supply as the number of orthopaedic and neurological patients increase with an aging population.

"In public hospitals, the waiting time for non-urgent scans is a few weeks. For AsiaMedic, we try to give patients same-day scans and reports."

There are challenges for any service provider wishing to increase its capacity. A scanner takes up about 1,000 sq ft of space and there is little spare room at hospitals which were built many years ago.

Furthermore, the capital cost is at least $1 million with installation cost adding another $500,000 or so to the bill, said Dr Wong.

If projected demand justifies it, AsiaMedic is prepared to invest in a fourth, or even fifth, MRI scanner, which would take over the space now occupied by AsiaMedic's administrative office on the 10th floor of Shaw House.

The payback period is only about 4 years, and the scanners are depreciated over 10 years, he said.

Rising number of PET scans for cancer

Aside from MRI scans, AsiaMedic expects a significant rise in revenue also from PET scans as it now has engaged a dedicated radiologist to issue reports on the scans (instead of an external panel of radiologists), and the reports can be issued on the same day as the scans (instead of a day later). 

"These are important factors. Doctors who refer cancer patients to us for PET scans want reports on the same day, so that they know what to tell their patients and plan ther treatment.

"Our competitors are able to report on the same day too but not 100% of the time -- but we are able to."

The charge for a PET scan is $1,700 upwards.

wellnesscentre3.14The health screening business has almost doubled in the year-to-date at AsiaMedic's wellness assessment centre. Photo: Company
Health screening 

Aside from scanner-based services, AsiaMedic offers health screening. 

Dr Wong said more Singaporeans are getting their health screened regularly, and AsiaMedic is seeing its share of a rise in local clients. They account for about 80% of its health-screening businesss now, compared to 60-70% a year or so ago. 

"So far this year, we are seeing a doubling of business in health screening. I believe this is due to rising awareness of the importance of early detection. And our enhanced marketing team has gained significant traction over the past year and secured several new contracts."

AsiaMedic's health-screening centre in Shaw House is one of only about a dozen such one-stop centres in Singapore, and it is probably one of the best equipped. 

Other businesses -- GP, aesthetics, Positron, cord blood

45rochesterparkComplete Healthcare International @ Rochester Park attracts expat clients. A second clinic will open in April in East Coast Road, targeting locals and expats.
Photo: Company

Complete Healthcare International (CHI), a general-practice targeting expatriates, has done better in 2013 than in 2012. 

CHI, which AsiaMedic acquired an 80% stake in last May, will open its second clinic in April, targeting expatriates and locals in the East Coast area.

Astique the Aesthetic Clinic also has improved its performance from last June when AsiaMedic acquired a 70% interest in it.

From 1 doctor, it now has 2 and will have another one from the 2H of this year, and the business is expected to turn profitable this year after breaking even in 2H last year. 

At the associate level, Positron, contributed $457,683, up 94% year-on-year. 

Positron, in which AsiaMedic holds a one-third stake, supplies isotopes for use in PET machines owned by its 3 corporate stakeholders. 

This year, another associate company will feature in AsiaMedic's results: Cryoviva Singapore, in which AsiaMedic holds a 25% stake. This is a private cord-blood banking business which received an operating licence in February.

Asked if AsiaMedic continues to pursue M&A activities, Dr Wong said: "We are open to M&A. We want to be bigger than what we are now."

AsiaMedic recorded revenue of S$14.7 million in FY2013, an improvement of 24% y-o-y.  Net profit attributable to shareholders was S$113,000 in FY2013 compared to S$43,000 in FY2012. 

Excluding one-off legal and professional fees, overseas business development costs, impairment of loans, as well as start-up costs of Cryoviva Singapore, the earnings before interest, taxation, depreciation and amortisation (EBITDA) would be approximately S$1.8 million for FY2013 compared to S$1.5 million FY2012.

AsiaMedic's FY2013 results can be viewed on the SGX website.

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