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Raffles Medical H1 profit falls 38.2% to S$17.2m on deferred surgeries

RAFFLES Medical Group posted a 38.2 per cent drop in net profit to S$17.2 million for its first half ended June 30, 2020, from S$27.9 million a year ago.

This comes amid a drop in revenue due to deferment of most elective surgeries and fewer offshore patients, partially offset by growth from the integrated healthcare provider’s healthcare services segment.

Earnings per share stood at 0.94 Singapore cent for the half year, down from 1.55 cents a year ago, according to its results released on Monday.

Revenue for H1 declined 5.4 per cent to S$241.4 million from S$255.3 million a year ago, dragged by a drop in revenue from its hospital services division due to most elective surgeries being deferred since the onset of the Covid-19 outbreak.

Revenue from the hospital services division fell 14.5 per cent to S$126.6 million from S$148.1 million a year ago.

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Singapore's "circuit-breaker" period required all businesses to shut non-essential activities, including providing certain types of clinical services such as dental, health screening and other non-urgent consultations.

Some of Raffles Medical’s clinics in China were also instructed by the local authorities to shut operations during the peak of the pandemic, with Raffles Hospital Chongqing serving a "significantly smaller" patient load as the movement of people was curtailed, the group said.

In Singapore, foreign patients were barred from coming to seek care at any hospital.

However, revenue for healthcare services grew 6.8 per cent to S$124.6 million, from S$116.6 million the year before. The segment was boosted by activities such as telemedicine, air-border screening and the swabbing of foreign workers.

The segment also provided the needed medical care for the government’s Changi Exhibition Centre-Community Care Facility for Covid-19 positive cases

An interim cash dividend of 0.5 Singapore cent per share was declared for the half year, unchanged from a year ago. The date payable and the record date for the dividend will be announced at a later date.

On its outlook, the group said it is starting to see patients return to its hospitals - including Raffles Hospital Chongqing and all its network clinics across the region. This comes as Singapore, China and countries across the region begin their recovery from Covid-19.

Raffles Medical said that preparations are on track for the opening of Raffles Hospital Shanghai, with fitting-out works and recruitment in progress. The actual date when operations commence will depend on Shanghai’s return to normalcy amid the Covid-19 situation.

Based on the current conditions and barring unforeseen circumstances, including the deterioration of the Covid-19 situation, the group said it expects to remain profitable for the rest of the year.

Shares of Raffles Medical closed flat at 91.5 Singapore cents on Friday.

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