Raffles Medical Group Ltd’s Latest Earnings: What Investors Need to Know
Raffles Medical Group Ltd (SGX: BSL), or RMG, is a leading private group practice in Singapore. This morning, it announced its second-quarter earnings. The financial period was from 1 April 2017 to 30 June 2017.
Here’s a quick rundown on the financial figures from the latest quarter:
1. Revenue came in at S$120.1 million, up 1% year-on-year. The Hospital Services division posted a revenue increase of 0.3% while revenue from the Healthcare Services division declined by 1.1%. To understand what each division does, you can check out the link here.
2. Net profit rose 0.5% year-on-year to S$16.8 million. RMG clocked in a net profit margin of 14% for the latest quarter, similar to the second quarter of the previous financial year.
3. Earnings per share for the quarter was at 0.96 Singapore cents, unchanged from previous year’s corresponding quarter.
4. As of 30 June 2017, RMG had S$59.3 million in net cash. This is a deterioration from the S$92.8 million in net cash that it had on 30 June 2016. Higher borrowings in the latest period to finance the construction of Raffles Hospital Extension brought about the decrease in net cash position.
5. Cash flow from operations was at S$26.3 million and S$2.8 million was spent on capital expenditure. Therefore, the healthcare group brought in around S$23.6 million in free cash flow for the latest quarter, an improvement from the S$22.1 million raked in a year ago.
All-in-all, it looks like a decent quarter for RMG. Despite the softer than expected demand from foreign patients, the firm saw growth in patient load.
In preparation for the opening of RafflesHospital Extension in the fourth quarter of the year, staff costs and costs of consumables increased 3.0% and 6.6% respectively. Staff costs ramped up mainly to the recruitment of more specialist consultants, management and clinical staff.
Shareholders will receive an interim dividend of 0.5 Singapore cent per share, unchanged from a year ago.
RMG gave updates on its collaboration with the government:
“RafflesHospital’s Emergency Care Collaboration with the Ministry of Health (MOH) was extended in June 2017 for another 5 years, allowing SCDF ambulances to continue to bring patients to RafflesHospital for subsidised care. With the opening of RafflesHospital Extension, RafflesHospital can leverage on its growing specialist physicians, increased bed capacity and outpatient clinics to care for the various groups of patients: private and subsidised, local and foreign.”
As for the expansion overseas, the firm had this to say:
“Construction of RafflesHospital Chongqing and RafflesHospital Shanghai is progressing according to plan. These hospitals are targeted to be operational by second half 2018 and second half 2019 respectively.”
In spite of the economic slowdown and increasing competition in the medical tourism arena, the firm is prepared and ready to meet the challenging conditions. It also added that it would “continue to be vigilant and respond to new opportunities that may arise”.
Shares of RMG opened at S$1.285 on Monday. This translates to a price-to-earnings ratio of around 32 and a dividend yield of 1.5%.