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What Raffles Medical Group Ltd’s Latest Annual Report Said About Its 2017 Performance

With a market capitalization of more than S$2 billion, Raffles Medical Group (SGX:BSL) is one of the largest listed healthcare provider in Singapore. It operates medical facilities in Singapore, China, Japan, Vietnam and Cambodia. In addition to Raffles Hospital in Singapore, the group also operates a network of family medicine and dental clinics and a variety of other services.

Raffles Medical released its 2017 annual report in late February this year. Here are some important points to take note of.

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Operational performance

In 2017, revenue inched up 0.8% to S$477.6 million from S$473.6 million a year ago. However, due to higher expenses, operating profit slipped to S$80 million from S$82 million in 2016. Diluted earnings per share came in at 4.0 Singapore cents, unchanged from a year ago.

Segmental information

The group breaks down its operations into three segments, namely, healthcare services, hospital services and investment holdings.

The hospital services segment include specialised medical services and the operation of Raffles Hospital and its medical laboratory and imaging centre. This segment saw a 2.3% uptick in revenue as it increased to S$291.8 million from S$285.3 million a year ago. This segment contributed 56% of the total revenue. Profit from this segment grew to S$62.4 million from S$61.4 million in 2016.

Healthcare services segment include the operation of medical clinics and other general medical services. It also includes the provisions of health insurance and a variety of other services. Revenue from this segment declined 1.6% to S$206.5 million from S$210 million in 2016. Profit from this segment fared even worse as it dropped by more than 50% from S$14.5 million in 2016 to S$6.5 million in 2017.

Finally, the third and smallest segment is the investment holdings segment. Revenue from this segment increased to $21.4 million from S$17.6 million in 2016. Profit, likewise, grew to S$15.9 from S$11.1 million a year ago.

Financial position

The group ended the year with total assets of S$1 billion and S$254 million in liabilities. It had total loans and borrowings of S$79 million. The company continues to have a healthy cash balance of S$98 million, albeit slightly lower than the S$112 million in 2016.

Raffles Medical Group also achieved S$82.6 million in cash flow from its operations, up 4.8% from a year ago. Capital expenditure, however, increased to S$140.6 million, due to the developmental cost of existing projects. This resulted in negative free cash flow of S$58 million for the year.


There was a final dividend of 1.75 cents per share. Together with the interim dividend of 0.5 cents per share, the total 2.25 cents per share was an increase of 12.5% from the previous year. With earnings per share of 4.0 cents, there is a dividend cover of 1.8 times.

Looking forward

A new Raffles Specialist Centre was opened on 22 January 2018. The 20-storey building is an extension of the current Raffles Hospital and expands the group’s services to include a new range of specialist services.

Dr Loo Choon Yong, executive chairman of Raffles Medical Group, said:

“The timely opening of the Raffles Specialist Centre enables us to grow the depth and breadth of Raffles Hospital’s Services over the next few years to serve even more patients.”

Management has also given an update on the development of the 700-bed hospital in Chongqing and 400-bed hospital in Shanghai. They said that both are on course for their target opening date. Raffles Hospital Chongqing is planned to open in the fourth quarter of this year, while Raffles Hospital Shanghai is scheduled to open in the second half of next year.

The two new hospitals will be Raffles Medical Group’s first hospital ventures outside of Singapore.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Raffles Medical Group. Motley Fool Singapore contributor Jeremy Chia own shares in Raffles Medical Group.