Raffles Medical posts 2Q18 net profit nearly flat as hospital services revenue declines

Singapore two-dollar bills

Raffles Medical reported on Monday that its second quarter net profit rose 0.8 percent on-year to S$16.89 million as an increase in revenue from healthcare services was offset by a decline in hospital services’ revenue.

Revenue for the quarter rose just 0.1 percent on-year to S$120.2 million, with revenue for healthcare services rising by 5.4 percent, while the hospital services division saw a 2.3 percent decline in revenue, it said in a filing to SGX before the market open on Monday.

“The increase in revenue from healthcare services division was contributed by the addition of new corporate clients, and a new contract, awarded by the Ministry of Health and Civil Aviation Authority of Singapore, to provide Air Borders screening services,” Raffles Medical said. “The decrease in revenue from the hospital services division this quarter was the result of softer than expected demand from the foreign patients, even though local patients registered a slight increase.”

Raffles Medical said the results were in line with its expectations as stated in the previous period’s results announcement.

For the first half, net profit rose 1.2 percent on-year to S$32.70 million, while revenue increased 2.3 percent on-year to S$240.39 million, Raffles Medical said.

Raffles Medical declared a 0.5 Singapore cent interim dividend, unchanged from the year earlier level.

In its outlook statement, the company noted that Raffles Hospital began refurbishment works for its outpatient clinics and inpatient wards in the quarter ended 30 June and that the works were “progressing well.” The facilities were due to open in the third quarter and the increase in primary and specialiast care capacity and expanded inpatient facilities were expected to support growth ahead, it said.

Raffles Health Insurance, or RHI, also recently obtained regulatory approval to enter the Integrated Shied market, it said.  RHI also entered a partnership with NTUC Income Insurance to offer NTUC Income Shield policyholders access to a panel of specialists at Raffles Hospital and other private hospitals in Singapore, it said.

In China, construction of Raffles Hospital Chongqing and equipment procurement were on schedule, and it was scheduled to open in the fourth quarter, it said, adding Raffles Hospital Shanghai, in Pudong, was expected to open in the second half of 2019.

The hospital operator said that barring unforeseen circumstances, it expected the company to grow and remain profitable this fiscal year.

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