Raffles Medical FY 2016

Revenue increases from 410,535 in FY 2015 to 473,608 in FY 2016 which is an increase of 15.4%. It was noted that staff costs inevitably increases by 18.8% from 203,537 in FY 2015 to 241,736 in FY 2016. In the financial statement itself, it explains that the staff cost increases due to acquisitions and increases in hiring of doctors, nurses and administrative personnel. However, the increase in staff cost does not directly translate to an increase in revenue. I feel investors should not penalise Raffles Medical heavily on this. The results can only be justified after another 1-2 quarters. Profit attributable to owners is slightly higher than the previous year at 70,210 in FY 2016 compared to 69,291 in FY 2015.

It was further explained that investment properties increased by S$27.6 million due to investment property development expenditure for Raffles Hospital Extension and Raffles Medical Shanghai Hospital Project. The Group’s net cash position increased from S$53.8 million as at 31 December 2015 to S$81.5 million as at 31 December 2016. This was mainly contributed by the strong operating cash flows from its business operations. Unsecured loans repayable after one year as 31/12/2016 of S$16.947 million is easily covered by its cash position. 

Net cash from operating activities increases from S$72.816 million in FY 2015 to S$78.854 million in FY 2016. Purchase of PPE decreases by almost half. In addition, Raffles Medical made a big sum of repayment of bank loans at approximately S$98 million.

Raffles Holland V has almost 95% of the space committed. I went to the site and took a look at it.

The picture is taken from courtesy of Yahoo. As you can see one of the key tenants is DBS with a range of restaurants on the 2nd floor. I believe this business unit will contribute and boost the Group’s results in the coming year.

JCProjectFreedom Raffles Medical Holland V
Overall, I feel this is a resilient business, easy to comprehend and highly lucrative. I am a customer of Raffles Medical Group, I will do a full body check up and it will easily cost S$500+ per session (during the good times and covered under company’s medical insurance to a certain limit). The hospital at Bugis is usually packed with wealthy students from overseas and expats. 

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