AsiaMedic reviewing businesses amid virus crisis, but can meet obligations, says its board

LOSS-MAKING healthcare company AsiaMedic expects to be able to fulfil its business obligations in the next six months, the board told shareholders on Wednesday, after questions from an investor watchdog on the business impact of the novel coronavirus pandemic.

Yet, with the virus outbreak taking a toll on business, the group may still have to pare down its "under-performing businesses", as it acts to control its costs, it said. 

In sharing its outlook, Catalist-listed AsiaMedic pointed to net proceeds of S$3.5 million from a rights issue in January 2020, as well as government support measures for business costs, such as rental relief and wage subsidies from the Job Support Scheme.

"Based on the present business volume and barring unforeseen circumstances, the group believes that it will be able to meet its obligations as and when they fall due for the next six months," the board told the Securities Investors Association (Singapore) and other shareholders.

Still, it noted that AsiaMedic "is operating at a substantially reduced capacity" from the two-month shutdown of non-essential businesses, with revenue and cash flow taking a hit.

Besides a previously-disclosed suspension of health screenings in schools and the community, the board flagged restrictions on executive health screening and aesthetics services, as well as a substantial decrease in the imaging and international clinic's patient load.

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AsiaMedic expects to post a loss for the six months to June 30, even as pandemic-related uncertainty has hampered its ability to determine the extent of the virus' impact on the group.

The board added that it is now reviewing its strategic plans, with a view to preparing itself "operationally and financially to tap opportunities when the situation recovers".

"We are looking into every aspect of the businesses, including the need for rationalising under-performing businesses, if necessary," it said. In the meantime, the group will continue to monitor the situation and adapt accordingly, such as by implementing cost-control measures."

AsiaMedic shares closed flat at S$0.01 on Wednesday, before the business update was released.