Northern Vietnam's Major Private Hospital Chain Reports 7 Consecutive Quarters of Losses

TNH Hospital Group, a major private hospital chain in northern Vietnam, reported a net loss of nearly VND 24 billion (approximately USD 1 million) in the second quarter, marking its seventh consecutive quarter of operating below cost. Despite revenue growth, rising expenses are impacting profitability. According to its second-quarter financial report, TNH recorded revenues of VND 158.7 billion (approximately USD 7.8 million), a 29% increase year-on-year. The company attributed this growth to contributions from new facilities, particularly TNH Viet Yen Hospital and its pharmaceutical segment. TNH Viet Yen Hospital's sales increased by 77% to nearly VND 24 billion, while Thai Nguyen International Hospital and TNH Pho Yen Hospital saw revenue improvements of 10% and 13%, respectively. However, despite the revenue surge, TNH Hospitals incurred a pre-tax loss of approximately VND 24.8 billion (USD 1.2 million). The loss after tax attributable to the parent company's shareholders was nearly VND 24 billion. The primary driver for the loss was a significant increase in costs. Management explained that the cost of goods sold rose by 32% in the second quarter. Furthermore, the company incurred additional operating expenses due to increased recruitment for the third phase of the Thai Nguyen International Hospital project and the TNH Lang Son hospital. Financial costs also escalated due to higher interest expenses from the TNH Viet Yen Hospital project. TNH Hospitals, formerly Thai Nguyen International Hospital, is headquartered in Thai Nguyen province. It is recognized as one of the prominent private hospital networks in Vietnam's midland and mountainous northern regions. Established in 2014, TNH has expanded to operate four hospitals in Thai Nguyen, Bac Ninh, and Lang Son provinces, employing over 1,000 staff as of late March this year. SSI Securities data indicates that foreign investors hold over 54% of the company's shares. For the first six months of the year, the company's cumulative revenue reached VND 276 billion (approximately USD 13.5 million), a nearly 28% increase compared to the same period last year. However, the business incurred a cumulative loss of nearly VND 71 billion (USD 3.5 million). For this year, TNH Hospital's leadership plans for a record revenue of VND 836 billion (USD 41 million), a 64% increase from the previous year. Nevertheless, the company anticipates a post-tax loss of VND 51 billion (USD 2.5 million). While the launch of Thai Nguyen International Hospital's third phase and TNH Lang Son hospital are expected to boost revenue, projected increases in depreciation and amortization costs (31%) and potentially doubled interest expenses compared to last year suggest that profitability will remain elusive in the near term.