RafflesMedical's earnings up 11% on more patients, clinics and specialists

Mainboard-listed RafflesMedicalGroup announced on Monday morning an 11 per cent rise in net profit after tax to $15.5 million for the third quarter of this year from $14.0 million for the same period a year ago.

Revenue grew 11.1 per cent to $94.5 million from $85.1 million for the same period last year.

Revenue from healthcare services grew by 16.4 per cent in Q3 2014, driven by a higher patient load, an expanding RafflesMedical clinic network as well as contributions from an increased provision of healthcare insurance services.

Hospital services revenue increased by 7.3 per cent in Q3 with the addition of new specialists to the group and higher inpatient admissions over the corresponding period last year.

Operating profit rose 8.1 per cent year-on-year to $18.2 million, despite startup costs arising from the expansion of the clinic network.

The company said it had a cash position of $124.5 million as at 30 September 2014 as a result of the strong operating cashflows from its business operations. This was after accounting for investment of $10.4 million in capital expenditure for business expansion as well as the distribution of interim dividends of $8.5 million to shareholders during the quarter under review.

RafflesHospital said it recorded a strong quarter-on-quarter growth as new specialists in Otorhinolarynology, Paediatric Surgery, Gastroenterology, Obstetrics & Gynaecology and Diagnostic Radiology joined the specialist team in Q3. The strong specialist recruitment drive is in line with the plans to expand several specialist centres, as well as the Emergency Department. This will progressively build up the breadth and depth of the hospital's capabilities in preparation for the new hospital extension.

Construction work on the 5-storey commercial building on the site of the former POSB Building in Holland Village is in progress. When the project is completed, approximately 9,000 square feet from a total gross floor area of 65,000 square feet will be dedicated to the expansion of medical and specialist services to cater to both local and expatriate patients, the company said. The remaining commercial space will be leased to DBS Bank and other upmarket retail as well as food and beverage tenants.

RafflesMedical said that with new public and private hospitals, as well as medical suites, being developed in Singapore and the region, the healthcare landscape will remain competitive and the more measured pace of economic growth in China, Hong Kong and Singapore may dampen general demand for healthcare.

But the ageing population in Singapore and the demand for healthcare services from patients in the region will continue to increase the overall need for reliable curative healthcare services, the company said.