SINGAPORE (Feb 27): Singapore Medical Group (SMG), the healthcare services provider, has swung back into profitability for FY16 with record earnings of $2.4 million on higher revenue.
Group revenue for the full year ended Dec 31 surged 34.3% on-year to $41.6 million, mainly driven by contributions from the healthcare segment, which grew 35% to $29.9 million.
Additionally, SMG’s newly-formed diagnostic & aesthetics segment – which was established following the 2016 acquisition of two of the group’s subsidiaries, Novena Radiology (NRPL) and Lifescan Imaging (LSI) – saw a 31.9% revenue increase to $11.2 million.
While gross profit grew 54.2% to $14.9 million for SMG, its new diagnostic & aesthetics segment’s contributions in profit margins has correspondingly led to an expansion in group FY16 gross profit margin by 4.6 percentage points to 35.8%.
Distribution and selling expenses consequently increased 25.2% to $2.5 million as the group ramped up marketing activities to fuel growth.
Administrative expenses increased 30.3% to $9.8 million as a result of a higher staff headcount following the acquisitions of NRPL and LSI.
Following acquisition of LSI, SMG recorded a revaluation $1.6 million gain on its previously-held equity interest in the joint venture (JV) entity.
However, the group reported other losses amounting $0.9 million, attributed mainly to one-off items such as the liquidation of a subsidiary and impairments resulting from JVs.
“Heading into 2017, we intend to aggressively explore inorganic growth opportunities that are value-driven and synergistic to the group’s existing specialties in Singapore and the Southeast Asian region,” comments SMG’s executive director and CEO, Beng Teck Liang.
“Our overarching growth strategy is to achieve market leadership positions in our key verticals. These include our developed specialisations in Oncology, Opthalmology, Obstetrics & Gynaecology, and Diagnostic Imaging. Leveraging on our extensive network of 24 specialties across 29 clinics, our unique ability to promote regional cross-selling opportunities should bode well for us in 2017 as we set forth on the group’s next phase of growth.”
Shares of SMG closed 2.52% lower at 58 cents on Friday.
