Raffles Medical Group profits slipped 13.7% to $13.65m in Q1

Startup costs for RafflesHospital Chongqing hit earnings.

Raffles Medical Group’s Q1 profits dipped 13.7% YoY to $13.65m from $15.81m in 2018, an announcement revealed. However, revenue edged up 6.7% YoY from $120.19m to $128.29m.

The decline in profits was blamed on startup costs for RafflesHospital Chongqing. Meanwhile, revenue growth was attributed to higher revenue for the firm’s healthcare services division and hospital services division which grew 8.9% and 3.2%, respectively, amidst an increase in premium from existing and new clients, Primary Care Network (PCN) Scheme and projects, as well as higher utilisation of inpatient capacities.

The group’s earnings before interest, taxes, depreciation and amortisation (EBITDA) also edged up 1.6% YoY from $23.3m in Q1 2018 to $23.6m for Q1 2019.

Also read: Raffles Medical profits up 0.1% to $16.41m in Q3

“On a comparable basis, excluding the results of RafflesHospital Chongqing, the group’s net profit after tax would have grown 2.1% instead of a decrease of 11.2%, and EBITDA would have been $25.4m, an increase of 9.3% as compared to Q1 2018,” Raffles Medical explained in its financial statement.

RafflesHospital Chongqing opened its doors in January 2019, and has reportedly embarked on outreach programmes to companies, embassies and business associations. Concurrently, Raffles Medical has also rolled out a series of marketing campaigns to raise its brand awareness in Chongqing. Additionally, RafflesHospital Singapore officially opened its new block RafflesSpecialistCentre in March 2019, with ambulatory and inpatient services from 31 different specialties.

RafflesMedical was also awarded a new tender to provide institutional medical services under the Ministry of Social and Family Development (MSF), during the quarter, which allowed it to add another eight RafflesMedical clinics to its panel of 40 Primary Care Network (PCN) clinics.

Whilst construction of RafflesHospital Shanghai, in Pudong, is underway, preparatory works for commissioning and operational phase has begun in Singapore.

“Based on the current economic conditions and barring unforeseen circumstances, the directors expect the group to grow its revenue and remain profitable in 2019, notwithstanding the expected gestation loss for RafflesHospital Chongqing,” the firm noted.