Raffles Med's Q1 results under threat from lacklustre tourist arrivals

Indonesian tourist arrivals slipped 16%.

Raffles Med’s first quarter results are under threat from lacklustre tourist arrivals in Singapore, a report by UOB Kay Hian revealed.

RMG’s Q1 results are typically weak because elective medical treatments are often geared towards the second half of the year. However, upcoming results are expected to be even weaker as medical tourists disappear.

Tourist arrivals to Singapore have been lacklustre so far, declining 5.5% year-on-year from January to February. In particular, tourists from Indonesia and Malaysia declined 16% yoy and 7% yoy respectively in February.

“We estimate that these two countries account for an estimated 25% of total foreign patient admissions. This segment is critical as hospital services account for about 60% of group revenue and we estimate foreign patients account for up to one-third of total contribution,” stated UOB Kay Hian.

“We expect Raffles Medical’s upcoming 1Q15 results to be seasonally weak and hampered by lacklustre tourist arrivals. Nevertheless, we see any pullback as a buying opportunity as longer-term fundamentals remain solid,” added the report.