OUE Lippo Healthcare Q4 net profit doubles on reversal of provision

OUE Lippo Healthcare on Wednesday posted a fourth-quarter net profit of S$2.6 million, more than double the net profit of S$1.2 million it made in the same period a year earlier, due mainly to a S$9.4 million increase in other income from the reversal of a provision for legal cost that is no longer required.

Revenue in the three months ended Dec 31, 2019 was S$5.1 million, up 10 per cent from the same period a year earlier. Most of the revenue is rental income from the 12 nursing homes in Japan.

Fourth-quarter earnings per share was 0.061 Singapore cent, up from 0.030 cent in the same period a year earlier.

Full-year earnings per share was 0.076 cent, reversing from a loss per share of 0.356 cent.

Net profit for the full year ended Dec 31, 2019 was S$3.2 million, reversing from a net loss of S$9.3 million in 2018.

OUE Lippo Healthcare, which was formerly known as International Healthway Corp, said: "Global economic growth continues to remain sluggish against the backdrop of sustained international trade tensions, as well as the emergence of the novel coronavirus."

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The escalation of the Covid-19 outbreak has created widespread global uncertainties and may induce fewer patients to visit hospitals to avoid the viral situation, the group said. "We remain prudent about our healthcare operations in Asia and are actively monitoring the rapidly evolving situation."

The group added: "Given the severity of the impact of the Covid-19 outbreak, we believe that China's healthcare reforms introduced after Sars in 2003 will gather pace, and potentially have far-reaching implications on the country's healthcare landscape. We believe that this may have an impact on the role of private healthcare operators and their business models in the overall healthcare ecosystem in China."

But it warned: "As there is no visibility on when the Covid-19 outbreak will end, we believe that there may be some impact on the timeline of our development projects."

Net asset value per share was 5.69 cents as at Dec 31, 2019, up from 5.52 cents as at Dec 31, 2018.

OUE Lippo Healthcare shares rose 0.3 cent or 5.56 per cent to S$0.057 on Wednesday before the results were announced.