Singapore Medical Group H1 profit nearly halves to S$3.5m on lower revenue

SINGAPORE Medical Group (SMG) posted a 49.5 per cent drop in net profit to S$3.5 million for its first six months ended June 30, 2020, from S$6.8 million a year ago.

This came as the Catalist-listed healthcare provider saw a drop in revenue and gross profit for the period, according to results released on Thursday.

Earnings per share stood at 0.72 Singapore cent for the half year, down from 1.42 cents a year ago.

Revenue for H1 fell 12.8 per cent to S$38.9 million, from S$44.6 million a year ago. This was due to falling patient loads as a result of non-essential medical services being deferred and temporary clinic closures during the "circuit-breaker" period.

The drop in top line was also attributed to a "significant decline" in medical tourism over the period due to travel restrictions stemming from the pandemic, the group said.

Gross profit for the first half was down 23.1 per cent to S$15.9 million, from S$20.7 million a year ago mainly due to a change in sales mix within SMG's health business segment, and the diagnostics and aesthetics business segment. The latter was also more negatively affected by the pandemic.

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No dividend was declared for the half year, unchanged from a year ago.

SMG executive director and chief executive Beng Teck Liang said the group witnessed a slowdown from the strong momentum it was garnering up until the period before the onset of Covid-19.

He said: "Despite the impact, the group's business operations showed strong resilience while the management team focused on cost controls and improving operational efficiency."

Looking ahead into the second half of the year, Dr Beng said that SMG has seen pent up demand returning for elective procedures and aesthetics. However, uncertainty remains on whether this momentum will continue and if medical tourism will return to pre-Covid-19 levels in the near term.

"Nevertheless, we remain confident in emerging from this pandemic as a stronger organisation. Further consolidation within the industry should present itself and we remain poised to capture opportunities for growth, leveraging the strong fundamentals of our business and track record of profitability," he added.

Shares of SMG closed flat at 25.5 Singapore cents on Wednesday.