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Asian Healthcare Specialists Ltd’s Latest Earnings: What Investors Should Know

Asian Healthcare Specialists Ltd (SGX: 1J3), or AHS for short, is made up of five senior and experienced orthopaedic medical specialists operating at four clinics under The Orthopaedic Centre brand. Together, they provide a wide range of general and sub-specialised orthopaedic, trauma and sports services. The company went public in April 2018.

This morning, AHS announced its financial results for the fiscal period ended 31 March 2018 (1H 2018). Here are 10 things investors should know from the earnings announcement:

1. Revenue for 1H 2018 inched up 0.5% year-on-year to S$5.6 million.

2. Purchased and contracted services cost fell 98.3% to S$64,000 in 1H 2018 due to the termination of consultancy services agreements and commencement of employment agreements for four doctors from October 2017.

3. Staff costs rose 411.1% to S$1.7 million while other operating expenses went up 125.2% to S$1.3 million. The higher staff costs were due to the transition to employment agreements and increased staff count. Other operating expenses went up mainly due to listing expenses of S$0.6 million.

4. Consequently, net profit surged 845% year-on-year to S$1.4 million in the latest period. Excluding the one-off listing expenses, net profit for 1H 2018 would have been higher at S$2.1 million.

5. Earnings per share (EPS) stood at 0.49 Singapore cents, up from 0.05 cents a year ago.

6. As of 31 March 2018, AHS had S$2.3 million in cash and cash equivalents with no debt. In comparison, at the end of September 2017, it had S$2.1 million in cash and cash equivalents, and zero debt.

7. Operating cash flow for 1H 2018 declined 39% to S$0.8 million mainly due to changes in working capital. The company spent S$7,000 in capital expenditure in 1H 2018 as opposed to S$17,000 in 1H 2017.

8. AHS has declared an interim cash dividend of 0.2 Singapore cent per share.

9. Dr Chin Pak Lin, the executive chairman and chief executive of AHS, said:

“The past financial period was filled with corporate milestones for the Group, in many areas including completion of our Restructuring Exercise, a new medical specialist joined our Group to further strengthen our expertise in treating patients with spine-related conditions, and achieving our listed status. In line with our efforts to reward our shareholders, we are pleased to propose our first dividend payout after listing, which amounts to 0.2 Singapore cents per ordinary share.”

10. Looking ahead, the healthcare outfit anticipates an increased demand for its medical services due to a growing and ageing population and an increasing percentage of insured patients in Singapore and the region.

AHS shares closed at S$0.275 apiece yesterday. If the EPS and dividend per share were to be annualised, the stock price translates to a price-to-earnings ratio of 28 and a dividend yield of 1.5%.

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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 Sudhan P doesn’t own shares in any companies mentioned.