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ISEC Healthcare Q2 profit dives 48% on absence of doctor, fewer patient visits

A SPIKE in expenses arising from the absence of a resident doctor at a Sembawang clinic contributed to the slump in net profit for ISEC Healthcare’s second quarter ended June 30.

The Catalist-listed medical eye-care provider on Wednesday night reported that its second-quarter net profit almost halved (48 per cent) to S$1.1 million, from S$2.2 million a year ago.

Earnings per share (EPS) for the quarter stood at 0.22 Singapore cent, down from 0.43 cent for the year-ago period.

A first interim cash dividend of 0.3 Singapore cent per share was declared for the quarter, down from 0.78 cent for the year-ago period. The proposed dividend for Q2 will be paid on Aug 28.

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Revenue inched up 1 per cent year on year to S$10.5 million for the quarter, mainly due to increased patient visits at the group’s Malaysia operations.

However, contributions from the Singapore operations fell amid fewer patient visits for the quarter, compared to a year ago.

Cost of sales rose 5 per cent to S$5.6 million as a result of increased business activities at the Malaysia operations.

Other expenses surged to S$1 million for Q2, more than seven times of S$140,000 in other expenses a year ago. This was due to impairment loss for goodwill of S$800,000 recognised for the quarter, relating to JL Medical (Sembawang) (JLMSB) which belongs to the group’s general health services segment. The resident doctor at the clinic is on an extended medical leave of absence, ISEC said on Wednesday.

“While the company has hired a replacement doctor who is operating the clinic… our past experience has shown that when the clinic is not helmed by the resident doctor, there is an impact on revenue,” ISEC noted in its financial statements.

Fewer patient visits at the JLMSB clinic led to its generated revenue falling 2 per cent year on year for the six months ended June 30.

Depreciation expenses more than doubled to S$620,000 for the second quarter, from S$250,000 for the year-ago period, mainly due to the depreciation charge on right-of-use assets of S$350,000 arising from the adoption of the SFRS(I) 16 accounting standards.

“The group continues to seek suitable opportunities in the markets of China, Indonesia, Myanmar and Vietnam, while we strengthen our existing presence in our core markets of Singapore and Malaysia,” ISEC said.

For the six months to June 30, net profit tumbled 36 per cent to S$3.2 million, while revenue increased 2 per cent to S$20.4 million.

EPS for the half year was 0.64 Singapore cent, down from 0.83 cent a year ago.

Shares of ISEC Healthcare closed at S$0.35 on Wednesday, up 0.5 cent or 1.45 per cent, before the results were released.