Raffles Medical ups FY17 dividend; prepares to launch hospitals in China
Singapore
PRIVATE healthcare group Raffles Medical raised its dividend payout for FY17, signalling its confidence in its outlook as the group prepares to launch a new hospital in China in the fourth quarter of this year.
For the full year ended 31 Dec, 2017, net profit edged up 0.8 per cent year on year to S$70.78 million.
Revenue was up 0.8 per cent to S$477.58 million on the back of higher hospital services revenue from the increase in local patient load, as well as higher income from the fully leased space at Raffles Holland V.
Revenue from hospital services and investment holdings grew by 2.3 per cent and 21.1 per cent respectively, while revenue from healthcare services dipped 1.6 per cent due to lower renewal of international healthcare plans for expatriates.
The directors recommended a final dividend of 1.75 Singapore cents per share, which - including an interim dividend of 0.5 cent paid in 2017 - brings the total dividend for the financial year to 2.25 Singapore cents per share. This is up from two Singapore cents in the year-ago period.
Meanwhile, earnings per share eased to 4.02 cents from 4.04 cents in the previous year. Net asset value per share rose to 41.45 cents as at Dec 31, 2017, from 38.12 cents a year ago.
At a briefing on Monday morning, executive chairman Loo Choon Yong told reporters that the increase in dividend payout in fiscal 2017 underscored the group's confidence that it can maintain this level of dividends for shareholders. "If we do well, we want to also have higher payout," he added.
The group also gave an update on its upcoming hospitals in China, saying that its new 700-bed hospital in Chongqing will open its doors in the fourth quarter this year, starting with 300 beds in its initial phase. Meanwhile, the 400-bed Raffles Hospital Shanghai will be launched in the second half of 2019.
In Singapore, its new 20-storey Specialist Centre, which offers 220,000 square feet of gross floor area, opened on Jan 22. The private healthcare group plans to use about half the building for expansion and rent out the other half.
"Various specialist centres and the radiology centre have been relocated to the new building from the existing hospital," Raffles Medical said in its financial statement. "With the new Raffles Specialist Centre in operation, works have begun on Raffles Hospital to open up new wards to increase bed capacity, as well as to refurbish the podium for new food and beverage and related shops."
While the launch of the hospital in Chongqing will incur startup costs of about up to S$10 million in the first year, the group is investing for the future, Dr Loo emphasised. It is aiming to have the new hospital in Chongqing break-even in about three years.
"We are investing for the longer term," he added. "We are reinvesting some of the profit to grow future income."
For FY17, investments in the Specialist Centre, the two upcoming hospitals in China as well as capital expenditure for business expansion amounted to S$141.6 million.
Shares in Raffles Medical closed unchanged on Monday, at S$1.10.
