ISEC Healthcare Ltd’s Latest Earnings: Healthy Growth Seen

On Tuesday, ISEC Healthcare Ltd (SGX: 40T) reported its second-quarter earnings. The reporting period was from 1 April 2017 to 30 June 2017.

As a brief background, ISEC Healthcare (where ISEC stands for “International Specialist Eye Centre”) provides specialist medical eye care services in Singapore and Malaysia. The company was listed on the Singapore stock exchange in October 2014.

You can catch up with the previous quarter’s earnings here.

Financial highlights

Here’s a rundown on the latest financial figures for the second-quarter:

1. Revenue was up 12% year-on-year to $9.25 million.

2. Net profit was $1.95 million, up 12% compared to a year ago.

3. Earnings per share (EPS) was 0.38 cents, up 8.6% from a year ago.

4. Cash flow from operations was $2.11 million and capital expenditure coming in at $240,000. The eye-care specialist generated free cash flow of $1.88 million.

5. As of 30 June 2017, ISEC Healthcare had $22.1 million in cash and equivalents and no debt. A year ago, the group had $26.7 million in cash and equivalents and no debt.

In summary, ISEC Healthcare’s saw both sales and profits grow. EPS did not change as the weighted average of ordinary shares increased to 517 million in the reporting quarter, up from 489 million a year ago. ISEC Healthcare also generated free cash flow and maintained a clean balance sheet.

Operational Highlights

Revenue rose due to the acquisition of JLM Companies (in December 2016). This boosted sales by $1.02 million. 

ISEC Healthcare included the following commentary on its outlook:

“A significant portion of the Group’s revenue is contributed by our Malaysian operations. The movement in medical tourism in Malaysia is expected to be closely correlated to the weakening of the Malaysian Ringgit that would result in stronger purchasing power of foreign currencies, and vice versa. However, as the presentation currency of the Group is in Singapore Dollar, the revenue from Malaysia operations translated to Singapore Dollar will be impacted by foreign exchange movements.

The Group expects the general operating environment of the healthcare industry to remain challenging for the next 12 months due to overall dampening of the economic climate in Singapore and the region.

Nevertheless, the Group will continue to remain focus to grow its talent pool and stay at the forefront of the ophthalmology services industry by driving innovation and adopting cutting-edge procedures and technology to offer its patients the best possible treatment.”

Foolish takeaway

ISEC Healthcare shares closed at $0.32 on Tuesday. Shares traded at 25 times earnings and a dividend yield of 1.9%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.