KPJ to cap dividends at RM80mil of net profit to repay debt

KPJ's Pasir Gudang Specialist Hospital

KUALA LUMPUR: KPJ Healthcare Bhd will put a cap on future dividend payouts at a maximum of RM80mil of its net profit to allocate more cash to repayment of its borrowings, its executive director Aminudin Dawam said.

"Our dividend payouts have always been around 40%-50% of our net profit so our board has advised us to put a cap in absolute terms of up to a RM80mil payout. Instead of a percentage, it will be an absolute cap," Aminudin said on Wednesday.

"Now we are paying about RM70-RM80mil a year and we will continue this. If our net profits are more than this then it (dividend) will still be capped at up to RM80mil. The excess profit, which we are confident of growing, will be used to offset our debt," he added.

Aminudin was speaking to reported at the sidelines of the Invest Malaysia 2017 conference.

KPJ, the largest public listed hospital grouping in Malaysia by bedcount, said the employment of a high gearing strategy is to help itself grow.

"This is how we expand and we have done this before. There have been some lean years too. For the last seven to eight years dividends have been at around 50% although there is no formal dividend policy by the company," its general manager of investor relations Khairul Annuar Azizi said.

"As our financial performance improve, we would like to pay off our borrowings," Aminudin said.