Raffles Medical Group second-quarter profit climbs 15.7% to S$14.5m

Bolstered by record revenue.

Raffles Medical Group announced that it achieved a record revenue of S$86.8 million in Q2 2013, an increase of 12.9% from S$76.9 million in Q2 2012.

Among its segments, revenue of Hospital Services segment grew strongly by 16.8% and Healthcare Services segment increased by 6.5%. More specialist consultants recruited and higher patient acuity have expanded the depth and breadth of medical services provided by the Group, which also contributed to the better performance, the company said.

With improved operating leverage and revenue performance, the Group’s operating profits increased by 17.5% from S$15.0 million in Q2 2012 to S$17.6 million in Q2 2013. The Group’s net profit after tax grew 15.7% from S$12.5 million in Q2 2012 to S$14.5 million in Q2 2013.

The Group continues to enjoy and benefit from strong operating cashflows from its various business units. As at 30 June 2013, the Group had a cash position of S$126.4 million, after final dividend distribution for the financial year ended 31 December 2012 of S$4.3 million and a bank loan repayment of S$16.0 million in February 2013. This healthy cash position provides financial flexibility for the Group in its growth and expansion plans.

RafflesHospital continues to perform well and is expected to contribute positively to the Group’s performance. The new SAP Hospital Information System for inpatient operations was launched on 1 July 2013. It incorporates nursing care management, electronic physician ordering, pharmacy orders and business office functions which will improve operational efficiency.

The Group is working with its team of consultants and the relevant Government authorities on the extension of the Raffles Hospital premises at North Bridge Road. The Hospital extension will enable the Group to build on and increase its clinical services and specialist offerings in the existing Raffles Hospital premise.

RafflesMedical clinics saw an improved quarter and year to date performance with new corporate clientele in the hospitality and education sectors. The stronger performance should carry through into the second half of 2013, with three new branches opening in major suburban population regions and continuing growth in corporate sales.

RafflesHealthinsurance maintained strong revenue growth from expansion of Singapore group employee benefits business and the global health insurance business.

On 10 June 2013, the Company announced that it had appointed Jones Lang LaSalle Property Consultants Pte Ltd to advise and manage the sale of the commercial property at 30 Bideford Road. Tender for the sale has been called and evaluation is still in progress.

For the company's outlook, it's expected that the additional beds of new public and private hospitals coming on-stream in Singapore and the region will keep the healthcare landscape 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. Barring unforeseen circumstances, the Directors are optimistic that the Group will continue to grow for the rest of the year," the Group said.