Catalist-listed OUE Lippo Healthcare reversed into the green with earnings of $113.8 million in 1HFY21 ended June. A huge contributor to this was a $109.97 million one-off gain arising from a shareholder loan conversion.
Excluding the gain, earnings came in at $3.67 million, reversing from the $1.26 million in losses seen in the previous year.
On a fully diluted basis, this translates to earnings per share of 2.56 cents, compared to losses per share of 0.028 cents in 1HFY20.
The group’s revenue - which mainly comprises rental income from 12 nursing homes in Japan, income from its pharmaceutical distribution as well the operations of the Wuxi Lippo Xi Nan hospital in China - edged down by 2% to $9.67 million in 1HFY21.
The marginal decrease is due to the weaker Japanese Yen to Singapore Dollar exchange rates, the group notes in its results announcement.
Meanwhile, cost of sales correspondingly dipped by 10% to $2.2 million due to the weaker Yen to SGD exchange rate as well as lower sales from the pharmaceutical distribution business due to delays in certain customers’ orders.
Even so, gross profit remained stable at $7.5 million due to improved gross margins from the pharmaceutical distribution business.
Meanwhile, the one-off gain saw a substantial jump in other income to $111.2 million in 1HFY21.
As at June 30, the group’s cash and cash equivalents stood at $31.8 million, down from $41.5 million in end June 2020.
Going forward, OUE Lippo Healthcare says it is closely monitoring the Covid-19 situation in China given the spread of the delta variant there.
The construction and development of its China Merchants – Lippo Obstetrics & Gynaecology Changshu Hospital and China Merchants – Lippo General Hospital Prince Bay Hospital are continuing as scheduled. The hospitals are expected to commission in 2023 and 2024 respectively.
The group has also adopted a cautious view on operations in Japan given that it is still in “the midst of the latest Covid-19 wave”.
Meanwhile OUE Lippo Healthcare says its joint venture hospitals with First Myanmar Investments Public Company remain operational despite the temporary closure of the emergency department at Pun Hlaing Hospital Hlaing Tharyar in Yangon.
For now, the group does not expect its financial performance for FY21 to see a drag from the political instability and surge in Covid-19 cases in Myanmar.
Shares in OUE Lippo Healthcare closed down 0.2 cents or 4.76% at 4 cents on Aug 2, before its results announcement.
Cover image: OUE Lippo Healthcare
