MAINBOARD-LISTED Raffles Medical Group on Monday (Jul 29) reported a net profit of S$30.6 million for the first half ended Jun 30, declining 48.8 per cent from S$59.9 million in the corresponding year-ago period.
Revenue slid 1.4 per cent year on year to S$365.7 million, from S$370.8 million.
Earnings per share for the period was S$0.0165, falling 48.8 per cent on the year from S$0.0322 in H1 FY2023. The healthcare group did not declare an interim dividend.
Raffles Medical attributed the decline to the cessation of Covid-19 activities and government grants. It said that its previous year’s first-half earnings included some Covid-19 related activities, which were discontinued progressively.
It also noted that the group adopted a new accounting practice for insurance, SFRS(I) 17 Insurance Contracts, in January last year, which now requires insurance expenditure to be recognised upfront instead of over the life of each respective contract.
This had resulted in the group’s insurance service expenses for the period increasing to S$78.6 million, up 29 per cent from S$60.9 million. Net expenses from reinsurance contracts also climbed to S$3.7 million, from S$1.1 million in H1 FY2023.
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The group’s health insurance arm registered a higher loss ratio consistent with industry trends, resulting in an operating loss of S$6.4 million for H1 FY2024, compared with a S$1.1 million loss a year earlier.
Despite the falls, the group’s hospital division remained strong, said Raffles Medical. The division grew its revenue by 4.5 per cent year on year to S$167.6 million, from S$160.4 million. Profit before tax for the segment jumped 65 per cent to S$14.3 million, from S$8.7 million.
The group added that it remains focused on growing and consolidating its three existing hospitals in China. Revenue from its Greater China operations expanded 5.9 per cent to S$30.5 million, from S$28.8 million the previous year.
“Although the Raffles Hospitals in China are getting better known and patient numbers have grown across board, our hospitals in Shanghai and Chongqing are still in the developmental phase and continued to incur gestational losses,” said the group.
As at Jun 30 this year, the group’s cash and cash equivalents was S$316.3 million, slightly lower than the S$343.6 million as at Dec 31, 2023.
Shares of Raffles Medical ended Friday at S$1.02, up 1 per cent or S$0.01.
