OUE Healthcare reports 1HFY2023 earnings of $1.8 mil, down 79% y-o-y

The lower earnings came in spite of an 85% y-o-y surge in revenue of $78.7 million which was attributed mainly to the consolidation of First REIT and the medical partners as well as higher revenue from Wuxi Lippo Xi Nan hospital and the China pharmaceutical distribution business. The medical partners refer to respiratory specialists and cardiothoracic surgical practice in Singapore of RMA Global Pte. Ltd. (RMA), The Respiratory Practice (Farrer) Pte. Ltd. (TRPF) and Breathing Heart Pte. Ltd. (BH).

On May 23, 2022, the group had incorporated a new subsidiary, Echo Healthcare Management, to acquire the medical partners mentioned above. Echo Healthcare Management is 60% owned by OUE Healthcare while the remaining 40% is owned by a subsidiary of OUE Limited. The acquisition was completed on June 30, 2022.

The higher revenue from Wuxi Lippo Xi Nan hospital came on the back of higher demand for outpatient services and medical check-ups. Revenue for the China pharmaceutical distribution business increased due to the sales of biologic products.

The revenue growth, however, was tempered by the higher cost of sales, which surged by 5.8 times to $18.2 million mainly from the consolidation of First REIT and the medical partners.

See also: Trump wins Republican nomination, setting up rematch with Biden

Gross profit rose by 53% y-o-y to $60.5 million.

Administrative expenses rose while the group incurred other expenses for the 1HFY2023 compared to other income in the same period the year before.

Finance costs also rose while share of results of equity-accounted investees, net of tax fell.

See also: OCBC posts record net profit of $7.02 billion for FY2023, up 27% y-o-y; plans final dividend of 42 cents

No dividend was declared for the period after taking into consideration the group’s cash flow requirements.

Cash and cash equivalents as at June 30 stood at $72.7 million.

Shares in OUE Healthcare closed flat at 3.2 cents on Aug 4.