SINGAPORE (Feb 20): Singapore O&G (SOG) on Feb 14 announced that its 4Q17 earnings increased 165.8% to $2.02 million from $0.76 million in 4Q16.
This brought FY17 earnings to $8.51 million, 3.4% lower than $8.80 million last year.
Revenue for the quarter was 10.3% higher y-o-y at $7.95 million, due to higher revenue from the group’s Obstetrics & Gynaecology (O&G) and Cancer-related segments as well as a contribution of $0.1 million from the new Paediatrics segment.
The group declared a final one-tier exempt dividend of 0.89 cent per share for FY17.
Lee Keen Whye, executive director and interim CEO of Singapore SOG says, “The Board wishes to reassure our shareholders and key stakeholders that business remains as usual, and we will continue to grow our new Paediatrics segment and strengthen our other segments in 2018”
Following the results announcement, Phillip Capital is reiterating its “accumulate” recommendation on Singapore O&G with a target price of 42 cents.
Due to the Zika virus outbreak between late-2016 to early-2017, the group saw a slowdown in its Obstetrics segment. But this was mitigated by stronger contributions from the Gynaecology segment.
Nonetheless, the group delivered 1,716 babies in FY17, comparable with FY16’s 1,728 babies.
Profit from the group’s Cancer-related segment also saw a significant increase thanks to stellar performance from Dr Radhika.
In a Tuesday report, analyst Soh Lin Sin says, “On a positive note, we believe that its Cancer-related segment should continue to gain traction and support the Group’s growth in FY18.”
Meanwhile, two doctors have broken even in FY17 and will start contributing positively to the group’s FY18 earnings.
On the other hand, the analyst also expects persistent weakness in Dermatology business on slowdown in Singapore medical tourism, as the group shared that foreign patient accounts for about 30% of Dermatology patient load.
“We are cognisant of the margin pressures arising from sluggish birth rate, slowing medical tourism, higher operating costs and the latent period of the new doctors. Nonetheless, we remain upbeat of the Group’s ability to deliver organic growth,” says Soh.
As at 12.00pm, shares in SOG are trading at 39 cents or 21.2 times FY 18 earnings with a dividend yield of 4.0%.
