Singapore Medical Group Q3 net profit up 60% on new acquisitions, contributions

SINGAPORE Medical Group's earnings surged in the third quarter, tracking a rise in revenue and helped by the group's share of results where joint ventures and associates had earlier contributed losses.

Net profit grew 59.8 per cent to S$3.16 million for the three months to Sept 30, according to results released on Monday, while turnover was up 18.9 per cent year-on-year to S$22.1 million.

Earnings per share was up to 0.66 Singapore cent from 0.44 cent before, while net asset value stood at 26.6 Singapore cents a share, against 23.57 cents as at Dec 31, 2017.

The increase in revenue came in both the health segment and the diagnostic and aesthetics segment, on contributions from a new imaging centre in Novena and acquisitions such as the Kids Clinic chain and aesthetic clinic SW1.

Singapore Medical Group also recorded a share of profits from joint ventures and associates to the tune of S$102,000 for the quarter, compared with losses of S$66,000 in the same period the year before.

A better showing by Indonesian joint venture Ciputra SMG and contributions from associate CHA SMG (Australia) offset losses at joint venture SMG International (Vietnam), the group noted in its statement.

It said in its outlook statement that its overseas joint ventures "continue to improve and have started contributing positively to the group's performance", adding that it remains optimistic about their continued growth.

A proprietary specialist tele-medicine platform that the group has developed could be used by medical tourists, and could also benefit market segments such as older patients, the women's and children's health vertical and other specialist verticals like oncology, it said.

Chief executive Beng Teck Liang said in a media statement that with the acquisition of SW1 in April, the group plans to expand aggressively in the region, including a second clinic in Singapore at OUE Downtown Gallery, and a branch in Vietnam.

"This is just the beginning, as we have plans to penetrate into new geographies such as Malaysia and Indonesia, which will serve as another gateway for regional expansion," he said.

Singapore Medical Group added that the board is looking at "various avenues to enhance shareholder value and possible corporate actions that may unlock value for shareholders", such as a possible formal dividend policy in FY2019 and a share buyback mandate.

Net profit for the nine months came in higher by 66.7 per cent at S$9.98 million on 27.8 per cent revenue growth to S$62.9 million.

No dividend was recommended for the period, unchanged from the year before.