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HC Surgical Specialists posts 38% higher Q1 net profit

CATALIST-LISTED HC Surgical Specialists on Tuesday posted a 38 per cent rise in net profit to S$1.2 million for Q1 2020 ended August, boosted by revenue from its newly-acquired units. 

Revenue for the quarter grew 27.9 per cent to S$4.9 million on the back of contributions from subsidiary JLES, which commenced operations in August last year, and Medical Services @ Tampines, in which HC Surgical acquired an additional 50 per cent stake in September last year. 

The topline growth was offset by a 19.5 per cent increase in employee benefits due to increased headcount. HC Surgical also recorded a loss of S$396,000 on the disposal of its investment in a subsidiary.

Buoyed by higher operating receipts, the company generated net cash from operations of S$1.38 million for the quarter, a 56.2 per cent improvement from a year ago.

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Separately, Heliconia Capital Management, a unit of Temasek Holdings, has invested S$5 million via convertible bonds into HC Surgical. 

The medical services company plans to tap Heliconia's network in Vietnam to expand its specialist endoscopy practice there. HC Surgical said that with rising affluence in Vietnam, demand for endoscopy for early detection of colorectal cancer will increase. 

The convertibles issued to Heliconia come with a three-year term and 5.5 per cent coupon, as well as a conversion price of S$0.5361. Heliconia will also receive a three-year option to subscribe for up to S$5 million worth of new ordinary shares of HC Surgical at an exercise price of S$0.62 per share. 

HC Surgical continues to be on the lookout for suitable partners for its expansion plans, "taking into consideration the macroeconomic outlook for the healthcare industry and market competition in the region", the company said in a press statement.

Chief executive Heah Sieu Min said the company's performance is "a result of our platform strategy, which enabled... the necessary operational support and patient referrals for growth".

Shares of HC Surgical closed flat at S$0.56 on Tuesday.