SINGAPORE (May 8): OUE Lippo Healthcare (OUE LH) has posted $0.2 million earnings, reversing from its 1Q18 loss of $2.7 million due to lower finance costs, higher other income as well as higher share of results of equity-accounted investees.
This comes despite a 7.3% decline in revenue to $4.8 million from $5.2 million previously, which came on the back of lower revenue from the group’s China pharmaceutical distribution business although revenue from rental of its Japan nursing facilities remained stable y-o-y.
In line with the lower revenue, cost of sales declined 22.4% to $1.3 million from $1.6 million, resulting in relatively flat gross profit of $3.5 million when compared to a year ago.
Administrative expenses grew 48.6% to $4.6 million from $3.1 million previously due to higher staff and related costs incurred over the quarter.
Other income of $1.6 million was booked over 1Q19 as opposed to none a year ago. This relates to the net consideration for the assignment of certain assets to a wholly-owned subsidiary of OUE LH to Innovation Lab Technology.
The group also registered a gain of $2.5 million under share of results of equity-accounted investees, net of tax, compared to a $75,000 loss in 1Q18, largely attributable to contributions from its associate First REIT, as well as its Bowsprit Capital Corp joint venture.
Finance costs near halved to $2.3 million from $4.1 million in 1Q18 on the back of interest savings and reduced amortisation expenses due to the repayment of a high-interest borrowing, as well as the absence of a $0.9 million foreign exchange loss booked in the previous year.
Despite noting “sluggish” global economic growth and uncertain trade negotiations between the US and China, OUE LH says it remains “broadly sanguine" about the prospects of its "recession-resilient" healthcare businesses in selected Pan-Asian markets.
Shares in the group closed 1.54% lower at 6.4 cents on Wednesday.
