Higher expenses, impairment drag Singapore O&G into the red

SINGAPORE O&G, a specialist healthcare provider for women and children, reported a net loss of S$8.9 million for the fourth quarter ended Dec 31, versus a net profit of S$23,000 a year ago.

Loss per share for Q4 was at 1.86 Singapore cents, compared to zero earnings per share in the preceding year.

Singapore O&G's fourth-quarter earnings were dragged down by the S$11.9 million in impairment of goodwill for the quarter, compared with the S$2.8 million impairment in the previous year.

The significant increase in impairment was due to declining earnings of the dermatology segment, amid an "increasingly competitive landscape" which reduced the recoverable amount of the cash-generating unit, Singapore O&G said late on Thursday night.

Moreover, the group registered higher operating expenses, mostly due to its four new clinics that began operations in late 2018 and 2019, as well as increased staff headcount.

Excluding the goodwill impairment in Q4 2019, adjusted net profit after tax would be S$3 million, up 6.9 per cent from S$2.8 million in the year-ago period.

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Revenue grew 21.8 per cent to S$10.7 million in Q4, from S$8.8 million a year earlier, largely thanks to the paediatrics segment which posted a S$1.2 million year-on-year increase in contribution.

For the full year, Singapore O&G posted a net loss of S$1.1 million, compared with a net profit of S$9.1 million in 2018, while revenue was up 14.6 per cent to S$39.8 million.

The board of directors said that as at Feb 19, they are not aware of any changes that will significantly affect the group's operations, notwithstanding the Covid-19 outbreak which is expected to affect private healthcare visitations as patients defer non-essential visits to hospitals in the near-term. 

The company also expects a decline in medical tourism from neighbouring countries and especially mainland China. 

Nonetheless, based on the current economic conditions and barring unforeseen circumstances, the directors expect the group to remain profitable at the operational level in the next 12 months.

As at 11.09am on Thursday, shares in Singapore O&G were trading flat at S$0.26.