Raffles Medical Q3 net up 10.3% at $13.87m

Boosted by a higher patient load and improved operating efficiencies, Raffles Medical Group's net profit for the third quarter ended Sept 30, 2013, rose 10.3 per cent year-on-year to $13.87 million.

Revenue climbed 8 per cent to $85.05 million as both its hospital services and healthcare services divisions recorded higher revenues, up 9.4 per cent and 5.7 per cent, respectively. Earnings per share for the quarter were 2.51 cents, up from 2.31 cents in the corresponding quarter a year ago.

Staff costs increased 8.3 per cent to $42.2 million but stronger revenue contributions from a higher patient load and improved operating efficiencies boosted operating profit by 11.2 per cent to $16.8 million.

During the quarter, its clinics saw an improved performance on the back of new corporate clients and the group said that it expects the strong performance to continue into the last quarter of this year as it opens new medical centres in suburban areas such as Pasir Ris, Bedok and Jurong.

The group had a cash position of $146.1 million as at Sept 30, after distributing interim dividends totalling $5.5 million. No dividend was declared for the third quarter.

In an update on the sale of its interest in Orchard Investment Holdings (OIH) - formerly known as Raffles Medical Management - to Diamante Holdings, the group said that the sale is expected to be completed on Thursday. OIH owns eight retail and office units in Thong Sia Building, where the group had initially planned to launch a specialist medical centre, but had failed to secure the necessary government approvals.

Commenting on the outlook, Raffles Medical said: "With new public and private hospitals being developed in Singapore and the region, the healthcare landscape will remain competitive. The more measured pace of economic growth in China and Singapore may have a dampening effect on healthcare demand. However, the group continues to be vigilant and responsive to new opportunities that may arise."

Its directors are "optimistic" that the group will continue to grow this year, barring unforeseen circumstances. Shares in Raffles Medical closed at $3.11 yesterday, one cent higher.

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