SINGAPORE (July 25): HC Surgical Specialists reported FY19 earnings of $7.21 million, up 61.4% from a year ago on higher revenue and other income but offset by higher expenses.
Full-year revenue increased 14.3% to $18.3 million mainly due to higher revenue contributions from new subsidiaries acquired during the current financial year, which included JLES which commenced operations in August 2018 and Medical Services @ Tampines (MST) where an additional 50% equity interest was acquired in Sept 2018, as well as higher revenue from existing subsidiaries.
This was partially offset by an increase in employee benefits expense of 14.4% to $6.5 million due to an increase in headcount from existing as well as new subsidiaries acquired during the current financial year, and higher accrual of bonus for the group’s existing employees.
Other expenses increased 48.3% to $3 million in FY19, primarily attributable to fair value loss on derivative financial instruments of $0.55 million and allowance for impairment loss on goodwill of $0.42 million.
However, net profit was bolstered by other income items, including the dividend income of $0.25 million; fair value gain on financial assets of $2.82 million; the deemed disposal in associates of $0.13 million related to dilution in the company’s shareholding in Medinex and gain on disposal of investment in associate of $0.37 million.
The directors of HC Surgical are recommending a final dividend of 1.2 cents.
In its outlook statement, HC Surgical says the collaboration with AIA as its exclusive screening service provider of colorectal cancer, which has an initial term of three years with effect from April 1, will be a growth driver.
With the acquisition of 25% stake in Medistar Services, the group is also in the process of opening an endoscopy centre within The Ming Clinic.
“Together with another new endoscopy center which is expected to be opened at Ang Mo Kio, this will increase our total number of endoscopy centers across Singapore to 11,” says HC Surgical.
The company says it may also enter into fundraising agreements with potential strategic partners for the purposes of financing suitable business expansion opportunities as and when they arise.
Shares in HC Surgical closed at 56 cents on Thursday.
