Raffles Medical Group (RMG) 3Q15 results missed estimates, with net profit inching up 1.2% to $15.6m on revenue of $101.5m (+7.4%).
Top-line was led by hospital services (+11.7%), which commanded better margins but earnings were dragged by higher startup costs of an additional floor at Raffles Hospital and the opening of a new Medical Centre at Shaw Centre, resulting in higher depreciation (+28.5%) and operating lease (+32.3%) expenses.
Maybank-KE believes that the RMG’s expansions should continue to drive healthy topline growth and believes that the street will not read too much into the temporary expansion costs.
Going forward, RMB expects the healthcare landscape to remain competitive and the more measured pace of economic growth in Singapore and the region may have a dampening effect on healthcare demand. The group is however closely monitoring market conditions, and will continue to be responsive to new opportunities that may arise both regionally and globally.
Fundamentals remain strong, with the group in a net cash position of $81.5m, representing 14.2¢ per share.
At the current price, RMG trades at 34.5x FY15E P/E.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment