Raffles Medical posts 8.1% drop in second-half profit to $44.7m

Dr Loo Choon Yong, executive chairman of Raffles Medical Group. ST PHOTO: KELVIN CHNG

SINGAPORE (THE BUSINESS TIMES) - Raffles Medical Group on Monday (Feb 21) announced that its net profit for the second half ended Dec 31, 2021 dipped by 8.1 per cent, to $44.7 million, from $48.6 million in the year-ago period.

This was attributed to higher tax expenses for the second half of financial year (FY) 2021, as the period's earnings before interest, taxes, depreciation and amortisation (Ebitda) had grown 4.9 per cent year on year to $86.1 million from $82.1 million. The second half of FY2020's Ebitda had also included $9 million in Jobs Support Scheme grants, which is not subject to tax.

Earnings per share for the second half of FY2021 also declined by 9.1 per cent to 2.39 cents, from 2.63 cents in the second half of FY2020.

The board has recommended a final dividend of 2.8 cents for FY2021, comprising a core dividend of 1.8 cents and a special dividend of one cent, subject to shareholder approval at the next annual general meeting.

It had previously stated its intention to consolidate its interim and final dividends into an annual core dividend of up to half its average sustainable profit after tax and minority interests, starting in FY2021. An earlier guidance stated that the total FY2021 dividend would be "not less than $0.025".

Despite the drop in net profit, the group posted a second half revenue jump of 16.3 per cent year on year to $380 million, from $326.8 million, due to the sale of Covid-19-related products and services.

It also noted that revenue for its healthcare services grew by 61.3 per cent in the second half of FY2021, whereas its second half FY2021 hospital services' top line went down by 6.2 per cent, both compared with the previous year. The group attributed this to Raffles Medical's resources being deployed to support various Government Covid-19 initiatives, such as the operation of vaccination centres and community testing.

For the full-year FY2021, revenue went up 27.4 per cent year on year to $723.8 million, from $568.2 million. This was matched by a 27.7 per cent year-on-year increase in net profit, to $84.2 million from $65.9 million.

Looking forward, the group said it expects to remain profitable in FY2022 based on current conditions and barring unforeseen circumstances, despite its Covid-19 support activities tapering off as the pandemic "evolves". It noted that its regional patients should return as international travel resumes.

It is also cautiously optimistic that its hospitals in China will continue to see improved patient loads.

Dr Loo Choon Yong, executive chairman of Raffles Medical Group, said: "With Raffles Hospital Shanghai operational, we now have hospitals in three major cities in China. With this addition to our network of medical facilities and services in the region, we can serve even more local and international patients with our Raffles brand of quality healthcare services."

The counter closed at $1.31, up two cents, or 1.6 per cent, on Friday.

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