SINGAPORE (Aug 6): Raffles Medical Group's expansion into mass market health insurance products will be another growth factor for the group, says executive chairman Dr Loo Choon Yong.
This follows the Aug 1 launch of the group's Raffles Shield, an Integrated Shield Plan covering hospitalisation and surgery. Its insurance arm, Raffles Health Insurance, had thus far focused on the business-to-business segment.
Speaking at a media briefing at its 2Q18 ended June results briefing this morning, Loo adds that the group is exploring other health insurance products catered to the masses, such as critical illness policies.
"A lot of these products are business-to-consumer [products]... Our expertise in healthcare makes it much easier for us to create new products for the consumer segment," he says.
In 2Q18, Raffles Medical reported a 0.8% rise in earnings to $16.9 million from a year ago.
This brings 1H earnings to $32.7 million.
Revenue for 2Q18 ended June was steady at $120.2 million. Revenue for Healthcare Services division increased by 5.4%, offset by a decrease of 2.3% in the Hospital Services division.
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.
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.
The group maintained its strong cashflow from operating activities of $18.9 million in 2Q18. The strong operating cashflow enabled the group to support its investments in RafflesHospital Extension, RafflesHospital Shanghai and RafflesHospital Chongqing. These investments, together with capital expenditure for business expansion, amounted to $16.5 million in 2Q18.
As at June 30, the group has a cash position of $108.4 million.
Raffles Medical has declared an interim dividend of 0.5 cent per share for the financial year ending Dec 31.
In its outlook, Raffles Medical says construction of RafflesHospital Chongqing and procurement of equipment are progressing according to schedule.
Recruitment of international and local physicians as well as senior hospital management staff has begun and the response has been positive.
RafflesHospital Chongqing is scheduled to open in the fourth quarter of this year.
Meanwhile, construction of RafflesHospital Shanghai, in Pudong, is progressing well. It is slated to open in the second half of 2019.
Based on the current economic conditions and barring unforeseen circumstances, Raffles Medical expects the group to grow and remain profitable in FY18.
As at 11.50am, shares in Raffles Medical are trading at $1.10.
