Medi Lifestyle misses profit guarantee for Malaysian healthcare unit

Lady Paradise posted a loss of $828,037, missing the guaranteed EBITDA of $644,027.

Medi Lifestyle Limited has reported that the profit guarantee for its Malaysian healthcare service provider, Lady Paradise, has not been met for the agreed profit target period.

Lady Paradise, previously known as HealthPro Life Sdn Bhd, was acquired by Medi Lifestyle on 18 December 2019 through its wholly-owned subsidiary, HealthPro Pte. Ltd. Following the acquisition, HealthPro assigned the rights and obligations under the agreement to HealthPro Malaysia, another fully owned subsidiary of the group.

According to the group, Lady Paradise recorded a loss of around $828,037 (RM 2.7m) in EBITDA, despite a guaranteed cumulative EBITDA of no less than $644,027 (RM 2.1m) under the acquisition agreement. 

Medi Lifestyle attributed this shortfall to business interruptions caused by the COVID-19 pandemic and the suspension of expansion plans for new postpartum centres due to "unfavourable" market conditions. Additionally, the group has shifted its strategic focus toward less capital-intensive businesses amidst the economic environment.

HealthPro Malaysia since then has formally notified the sellers, demanding that they make good of the shortfall in cash within 14 days of the notification.

(RM 1 = $0.30)