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Raffles Medical Q1 profit falls 13.7% on Chongqing hospital start-up costs

RAFFLES Medical Group on Monday morning reported a 13.7 per cent drop in its first-quarter net profit to S$13.6 million from S$15.8 million a year ago, due to start-up costs for Raffles Hospital Chongqing.

The group’s revenue for the three months ended March 31 increased 6.7 per cent year on year to S$128.3 million.

Revenue for the healthcare services division grew 8.9 per cent, mainly because of an increase in premium from existing and new clients, the primary care network scheme and projects. Meanwhile, revenue from the hospital services division rose 3.2 per cent, as a result of higher utilization of inpatient capabilities.

Earnings per share for Q1 was 0.76 Singapore cent, down from 0.89 cent in the previous year.

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No dividend was declared for the first quarter ended March 31.

On a comparable basis, excluding the results of RafflesHospital Chongqing, the group’s net profit after tax would have grown by
2.1 per cent instead of a decrease of 11.2 per cent, while earnings before interest, tax, depreciation and amortization (EBITDA) would have been S$25.4 million, an increase of 9.3 per cent year on year, said the company.

It added that the gestation loss for RafflesHospital Chongqing is within expectation.

The group’s net debt position increased from S$10.5 million at the end of 2018 to S$14.2 million as at March 31. This was primarily due to project expenditure incurred for Raffles Hospital Shanghai and Raffles Hospital Chongqing.

Raffles Medical’s business operations continued to generate strong operating cashflows, contributing to a cash position of S$111.8 million as at March 31. This was after accounting for the S$26.5 million payment for fixed assets under development as well as capital expenditure in the first quarter.

Based on the current economic conditions and barring unforeseen circumstances, Raffles Medical’s board expects the group to grow its revenue and remain profitable in 2019, notwithstanding the expected gestation loss for Raffles Hospital Chongqing.

Shares of Raffles Medical Group closed flat at S$1.07 on Friday.