Raffles Medical’s H1 earnings fall 48.8% as Covid-19 activities, government grants cease
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Raffles Medical said its hospital division remains strong, growing its profit after tax by 65 per cent for H1 FY2024.
PHOTO: ST FILE
Megan Cheah
SINGAPORE - Mainboard-listed Raffles Medical Group on July 29 reported a net profit of $30.6 million for the first half ended June 30, declining 48.8 per cent from $59.9 million in the corresponding year-ago period.
Revenue slid 1.4 per cent year on year to $365.7 million, from $370.8 million.
Earnings per share for the period was 1.65 cents, falling 48.8 per cent year on year from 3.22 cents in the first half of financial year 2023. The healthcare group did not declare an interim dividend.
Raffles Medical attributed the decline to the cessation of Covid-19 activities and government grants. It said its previous year’s first-half earnings included some Covid-19-related activities, which were discontinued progressively.
It also noted that the group adopted a new accounting practice for insurance, SFRS(I) 17 Insurance Contracts, in January 2023, which now requires insurance expenditure to be recognised upfront instead of over the life of each respective contract.
This had resulted in the group’s insurance service expenses for the period increasing to $78.6 million, up 29 per cent from $60.9 million. Net expenses from reinsurance contracts also climbed to $3.7 million, from $1.1 million in the year-ago period.
The group’s health insurance arm registered a higher loss ratio consistent with industry trends, resulting in an operating loss of $6.4 million for the first half of financial year 2024, compared with a $1.1 million loss a year earlier.
Despite the falls, the group’s hospital division remained strong, said Raffles Medical. The division grew its revenue by 4.5 per cent year on year to $167.6 million, from $160.4 million. Profit before tax for the segment jumped 65 per cent to $14.3 million, from $8.7 million.
The group added that it remains focused on growing and consolidating its three existing hospitals in China. Revenue from its Greater China operations expanded 5.9 per cent to $30.5 million, from $28.8 million in the previous year.
“Although the Raffles Hospitals in China are getting better known and patient numbers have grown across board, our hospitals in Shanghai and Chongqing are still in the developmental phase and continued to incur gestational losses,” said the group.
As at June 30, the group’s cash and cash equivalents were $316.3 million, slightly lower than the $343.6 million as at Dec 31, 2023.
Shares of Raffles Medical closed down two cents, or 2 per cent, at $1.00 on July 29. THE BUSINESS TIMES
