Raffles Medical Q3 earnings up 1.2%

SINGAPORE - Raffles Medical posted a 1.2 per cent rise in net profit to $15.6 million for the the third quarter ended Sept 30 compared to the the same period a year ago.

This came on the back of a 7.4 per cent rise in quarterly revenue to $101.5 million compared to $94.5 million a year ago, the company said on Monday (Oct 26).

Revenue from its hospital services and healthcare services divisions increased by 11.7 per cent and 3.5 per cent respectively from a year ago.

The strong performance from the hospital service division was offset by higher depreciation and operating lease expenses. This increase in cost was mainly due to new and expanded operations at RafflesHospital and the newly opened RafflesMedicalCentre Orchard (Shaw Centre), the group said.

It added that the continued strong operating cashflows resulted in a healthy cash position of $89.5 million as at Sept 30. This was after accounting for investment of $54.4 million for the Shanghai New Bund International Hospital Project as well as distribution of interim dividends of $8.6 million to shareholders.

Looking ahead, Raffles Medical said the healthcare industry will remain competitive and the more measured pace of economic growth in Singapore and the region may have a dampening effect on healthcare demand.

However, it believes it has positioned well for the future and, barring all unforeseen circumstances, the group will continue to grow for the rest of 2015.

On its current and future ventures, the company said Raffles Holland V is currently on track to be completed in the first quarter of 2016. Approximately 9,000 square feet will be dedicated to the expansion of the group's medical and specialist services to cater to both local and expatriate patients. The remaining commercial space will be leased to DBS and other tenants.

RafflesMedical also opened a new clinic at Rivervale Mall on September 21 2015, while three clinics in the Bishan-Toa Payoh cluster are being expanded and upgraded. It said continued growth is expected from the government initiated schemes, namely the Community Health Assist Scheme (CHAS), the Pioneer Generation (PG) package and the FlexiMedisave scheme.

The group is also expected to benefit from the acquisition of International SOS (MC Holdings) Pte Ltd through a joint venture. The ten clinics in this joint venture (six in China, three in Vietnam and one in Cambodia) will be operated and branded under RafflesMedicalGroup in the near future and will support the existing network in Singapore, Hong Kong and Shanghai and planned expansion into the region. However, the transaction was completed on Oct 16 and will not have a material impact on the group's financial performance for the current financial year.