Company halves final dividend to free up cash

Catalist-listed Singapore Medical Group (SMG) has halved the planned final dividend that the board had proposed in February, citing a need to save cash amid the coronavirus pandemic.

The board now intends to pay out 0.4 cent a share, subject to shareholders' approval at an upcoming general meeting, according to a bourse filing last Friday evening.

SMG has warned that its financial results will likely take a hit from the Covid-19 situation, as a two-month circuit breaker shuttered non-essential medical services such as Lasik eye treatments, health screenings and non-emergency dental services.

On top of that, the travel ban on short-term visitors has affected medical tourism revenue from segments such as oncology, cardiology and diagnostic imaging; foreign patients contribute between 15 per cent and 20 per cent of group turnover, the board disclosed.

SMG turned a net profit of $13.7 million in the year that ended on Dec 31, 2019, and expected to pay out 0.8 cent a share - nearly $3.9 million altogether - after not declaring any dividend in the corresponding period the year before.

But the latest dividend trimming, which was dubbed "a more prudent stance", is expected to save about $1.9 million in cash "to ensure the viability of the group" if restrictions are extended.

Still, the board added that SMG has little liquidity risk and should be able to operate as a going concern, "barring unforeseen circumstances and assuming the gradual and effective easing of the circuit breaker measures".

SMG shares closed up by half a cent or 2.04 per cent to $0.25 before the news.

THE BUSINESS TIMES