Raffles Medical Group posts 4.5% rise in Q2 profit, buoyed by higher revenue

SINGAPORE-LISTED Raffles Medical Group (RMG) on Monday reported a 4.5 per cent year-on-year rise in second-quarter net profit to S$16.7 million, buoyed by higher revenue from all divisions.

Earnings per share for the three months ended June 30, 2016, was 0.96 Singapore cent, up from 0.94 cent a year ago.

The group declared an interim dividend of 0.5 Singapore cent per share for the financial year ending Dec 31, 2016. This will be paid on Aug 31, 2016.

Revenue grew 19.8 per cent to S$119 million for the quarter, lifted by all divisions' performance.

Contributions from healthcare services and hospital services went up by 42.2 per cent and 7.9 per cent respectively.

"The strong growth in the group's revenue was mainly due to higher patient load, an expanding RafflesMedical clinic network, higher revenue contributed by more specialist consultants as well as the newly acquired International SOS (MC Holdings) Pte Ltd and its subsidiaries (combined entity known as MCH)," said RMG.

Excluding the revenue contribution from MCH, the group's revenue would have grown by 8.7 per cent.

Higher revenue was offset by greater staff costs, operating expenses and supplies used.

The group said higher staff cost was the result of staff recruitment for the opening of the new medical centre at Raffles Holland V. On a comparable basis, excluding the performance of MCH, the group's operating profit growth would have been 6.5 per cent instead of 4.1 per cent.

As at June 30,2016, the group maintained a strong cash position of S$123.6 million, after accounting for payment of S$6.5 million for investment in RafflesHospital Extension and Raffles Holland V as well as its final dividend distribution of S$5.2 million for the financial year ended Dec 31, 2015.

The group said there was an increase in patient visits in Q2 of the operations of MCH under the group, compared with the previous quarter. It added that new healthcare membership plans are being offered to its clients in China, and that further growth in revenue is expected for the rest of the year, arising from the offering of similar plans and expanded scope of medical services in the other countries in which MCH operates.

In its outlook, RMG said: "The moderation of the economic growth in Singapore and the region may have a dampening effect on the healthcare sector. However, the group is well positioned to grow and expand in Singapore and the region through its branch network, MCH Clinics and the opening of RafflesHospital Extension next year. The group will continue to be vigilant to respond to new opportunities that may arise in Singapore and the region."