Raffles Medical Group upbeat as it stays on growth path

RAFFLES Medical Group is still on the growth path, posting on Monday a 2.2 per cent year-on-year rise in second-quarter net profit to S$15.95 million. The healthcare provider is also upbeat on its future growth.

Revenue for the three months ended June 30 rose 7.2 per cent to S$99.25 million, on the back of gains in the hospital services and healthcare services divisions, at 6.6 per cent and 5.7 per cent respectively.

Higher patient load saw profit before tax grow to S$19.5 million, up 2.8 per cent. This was after factoring in higher staff costs, depreciation expenses and operating lease expenses.

The higher operating expenses came as Raffles Hospital expanded its operations and Raffles Medical Centre Orchard began its services last month.

Earnings per share for Q2 remained at 2.81 cents from a year ago.

For the first six months of 2015, net profit climbed 2.5 per cent to S$30.93 million while revenue rose 7.8 per cent to S$194.28 million.

Group executive chairman Loo Choon Yong noted that the more measured pace of economic growth in Singapore and the region has moderated healthcare demand, but added that the group is "on track" with the planned completion of several projects. Raffles Holland V, a commercial building which will have a medical centre as well as retail and food and beverage space, is expected to be completed in the first quarter of next year.

Work on Raffles Hospital's new extension building is due for completion in the first half of 2017. On completion, "the integrated medical complex will offer significant scope for Raffles Hospital's expansion and growth for the next few years". A joint venture with Shanghai LuJiaZui Group was also inked in May for the construction of an international general hospital in Shanghai's Pudong New Area.

Adding that the group is well-positioned for future growth, Dr Loo said that there is no reason to change the course or pace of these upcoming projects.

On the home front, Raffles Medical and Raffles Dental have continued to benefit from the government-initiated Community Health Assist Scheme (CHAS), Pioneer Generation Package, and Flexi-Medisave Scheme.

The Emergency Care Collaboration (ECC) between the Ministry of Health and Raffles Hospital has also been progressing smoothly, Dr Loo said, adding: "Hopefully, this may blossom into other public-private collaborations."

The group declared an interim dividend of 1.5 Singapore cents per share, unchanged from the corresponding period last year.

In the stock market on Monday, Raffles Medical Group shares eased nine cents to close at S$4.86 amid a regional market fall sparked by the sharp drop in China bourses.