SINGAPORE (Aug 14): Singapore Medical Group (SMG) has announced earnings of $4 million for the half-year ended June, a more-than sixfold improvement compared to its $0.63 million in earnings for 1H16.
Revenue for 1H16 jumped 57.5% to $30.7 million, driven by growth in the group’s cornerstone healthcare segment, which increased in revenue contribution by 42.3% on-year to $21.9 million, mainly due to its subsidiaries, the Astra Companies, which was acquired in Feb this year.
Its topline was further boosted by a 125.7% increase in revenue contributions from the diagnostic & aesthetics segment – which grew to $8.6 million from $3.8 million a year ago on subsidiary Lifescan Imaging (LSI), for which the group acquired its remaining 61.9% interest which it previously did not own, in Sept last year.
As a result, gross profit increased to $13.3 million, doubling from the $6.5 million registered in the same period a year ago, whereas gross profit margin increased by 10 percentage points to 43%.
Over 1H17, other income of $0.2 million was recognised mainly due to the recognition of a gain from disposal of property, plant and equipment, whereas no such gain was recognised in 1H16.
In line with the revenue increase, distribution and selling expenses grew 18.6% to $1.4 million, whereas financial expenses grew to $0.2 million from $55,000 a year ago due to higher interest expenses incurred for a new bank loan obtained for the acquisition of the Astra Companies and finance leases arising from the acquisition of LSI.
Administrative expenses, too, spiked 64.6% over the half-year to $7.2 million due to an increase in staff headcount resulting from the acquisition of LSI and the Astra Companies, and a higher depreciation charge for the financial period resulting from these acquisitions.
“Heading into the second half of the year, a key focus will be on integrating our newly acquired entities while driving operational efficiencies in areas such as staffing, marketing and space utilisation,” says Beng Teck Liang, executive director and CEO of SMG.
“This should bode well for the group as we strive to improve our profit margins by deriving cost and revenue synergies from our acquisitions while allowing doctors to focus on what matters most – providing our patients with the highest quality of care,” he adds.
Shares in SMG closed 1 cent lower at 62 cents on Friday.
