Financial Times - Ceylon Hospitals to enhance capital reserves

Ceylon Hospitals to enhance capital reserves

Ceylon Hospitals Limited, more popular as the Durdans Hospital is likely to revalue its prime free hold land of 180 perches and the buildings in Colpetty, after nearly seven years, according to stock market sources.

“The company has not revalued their current premises for the past seven years and according to the accounting standards employed by them every three to five years they do a valuation,” a stock market analyst told The Sunday Times FT.

He said that since the last revaluation in 1999 in which the property was estimated to be worth Rs.386 million, the land value has substantially shot up. “The revaluation should increase the company’s net asst per share and the revaluation reserves which in turn should enhance capital reserves,” he added.

The company's net profit increased by19.6 percent year on year to Rs. 41.8 million and net debt to equity ratio declined from 31.5 percent as at March 2006 to 26.6 percent as at June 2006.

The industry sources said that the hospital's average occupancy rate remains at almost 100 percent amidst inelastic demand and limited supply of private sector health care. They said that second development phase started in January 2006 and expected to be completed by mid to end 2008, could even double the current bed capacity from a current 170.

“There is a shortage of 1500 beds in Colombo and the greater Colombo area and this will put Ceylon Hospitals on a competitive advantage when they complete their new facility,” an industry source said.

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