Earnings of healthcare provider Raffles Medical Group plunged 38.2% to $17.2 million for 1H2020 ended June, from $27.9 million a year ago, following the deferment of elective surgeries and a dip in foreign patients during the circuit breaker period.
This translates to earnings per share (EPS) of 94 cents on a fully diluted basis, down 39.4% compared to the 1.55 cents in 1H2019.
Revenue for the first six months of the year inched down by 5.4% to $241.4 million, following a 14.5% dip in income to its Hospital Services division to $148.1 million.
This is a result of the deferment of elective surgeries which were deemed non-essential medical services during Singapore’s circuit breaker period from April 7 and June 1.
The segment was also hit by fewer offshore patients served, particularly between April and June when travel restrictions were tightened. This was blow to the group as these patients account for close to a third of its overall patient count.
Similarly, the group faced a smaller patient load at RafflesHospital Chongqing as well as its clinics in China, due to the movement restrictions imposed there.
A further decline in takings was mitigated by a 6.8% growth to its Healthcare Services division to $124.6 million. This follows an uptake in activities such as air-border screening, swabbing of migrant workers, teleconsulting services and support rendered to persons with Covid-19 at the Changi Exhibition Centre community care facility.
Even so, Raffles Medical’s bottom line was hit by a 24% increase in purchased and contracted services to $31.5 million, a 27.6% surge in depreciation of property plant and equipment to $16.6 million, and a 15.3% increase in amortisation of intangible assets to $963,000.
Overall, net profit plummeted 41.6% to $16.3 million in 1H2020, from the $27.9 million posted a year ago.
As at June 30, cash and cash equivalents stood at $151.5 million, up from the $100.8 million at end-June 2019.
The group has declared an interim dividend of 0.5 cents a share, unchanged from a year ago. The date payable and the record date for the dividend will be announced at a later date.
Looking at Raffles Medical’s 1H2020 performance, executive chairman Loo Choon Yong says the company has “remained resilient”.
“Our strategic investment in technology, together with our experience from managing SARS, H1N1 and MERS, have helped us improve our protocols and operations for care during epidemics. This has enabled us to respond with agility and flexibility while continuing to provide quality care during this pandemic”.
Loo is beginning to see bright spots as patient loads gradually return to pre-Covid levels at its network clinics across the region as well as at its hospitals in Singapore and Chongqing. This comes as Singapore, China and countries across the region are enroute to recovering from the Covid-19 crisis.
To this end, the group says it is on track for the opening of its Shanghai hospital, with fitting-out works and recruitment in progress. The actual date when operations commence hinges on when the Covid-19 pandemic abates in Shanghai.
Meanwhile, it is stepping its ante in China by focusing on fulfilling demand for high quality healthcare services from affluent Chinese and the expatriate community in the country.
As such, the group is in the midst of completing renovation works to its 54,000 sq ft medical centre at the Beijing International Clinic. Upon its reopening in the second half of this year, it will offer minimally invasive surgeries that will complement its clinical services.
For now, the group expects to remain profitable for the rest of the year – based on current conditions and barring unforeseen circumstances including the deterioration of the Covid-19 situation.
As at 11.34am, shares of Raffles Medical Group were flat at 91.5 cents.
