Asian Healthcare Specialists H1 profit down 4.2% on higher staff costs

CATALIST-LISTED Asian Healthcare Specialists (AHS) on Thursday posted a fall in net profit for its fiscal half-year as a rise in staff costs outpaced revenue growth.

For the six months ended March 31, net profit declined 4.2 per cent to S$1.38 million, from S$1.43 million last year.

This translated to earnings per share of 0.44 Singapore cents for the half-year period, down from 0.49 cents previously.

The medical services group has declared an interim cash dividend of 0.4 Singapore cent, up from a dividend of 0.2 Singapore cent in the year-ago period. This will be paid on or about May 28, with books closure date set for May 21, AHS said.

Revenue for the half year grew 5.2 per cent to S$5.94 million, mainly due to the acquisition of an anaesthesia arm in November, which contributed S$474,000 to the group's earnings in H1 2019. This helped to offset a 3.2 per cent revenue decline to S$5.47 million from its orthopaedic services segment, mainly attributable to a fall in the number of patient visits from a year earlier.

Meanwhile, staff costs rose 35.5 per cent to S$2.31 million for the half-year period, on the back of an increase in the number of staff hired from 18 employees to 31, including independent directors, AHS said.

Looking ahead, the group noted that the healthcare business remains "highly competitive", and that it will be mindful of increasing operating and compliance costs.

Nonetheless, AHS believes that it will be able to ride on a growing demand for medical services in Singapore, on the back of an ageing population and an increasing percentage of insured patients within Singapore and the region.

The group's strategic focus is to grow via acquisitions, joint ventures or strategic alliances, and investment into synergistic businesses and cross-disciplines, it said. It added that it will also invest in human talent, both at management level and in healthcare professionals, in a bid to strengthen the group's market position.

AHS was listed on the Singapore bourse in April last year. The counter last traded at S$0.255 on April 29, up 2.5 Singapore cents or 10.9 per cent. As at May 8, the company has a market cap of about S$83.1 million.