Singapore Medical Group (SMG) posted 49.5% lower earnings of $3.5 million for 1H20 ended June, from the $6.8 million registered a year ago due to the “challenging market conditions”, and lower number of medical tourists, which account for some 15% to 20% of the group’s revenue.

Revenue for 1H20 fell 12.8% y-o-y to $38.95 million due to a lower number of patients arising from the deferment of non-essential medical services and temporary clinic closures during the circuit breaker period from April to June. The decrease in topline was also attributable to the decline in medical tourism in the region due to travel restrictions.

Gross profit fell 23.1% y-o-y to $15.9 million due to the decrease in revenue.

Other income rose 14.3% y-o-y to $80,000 mainly due to foreign exchange gain arising from the revaluation of the foreign currency loans given to CityClinic Asia Investments.

Earnings per share for the half-year period fell 49.3% to 0.72 cents compared to the 1.42 cents the year before.

Administrative expenses fell 8.4% y-o-y to $9.4 million mainly due to the decrease in staff costs from wage credits under the Job Support Scheme (JSS).

Financial expenses increased by 13.3% y-o-y to $0.8 million primarily due to interest expenses on the convertible loan in February 2019, which was drawn down in June 2019.

Share of loss of joint ventures and associates decreased by 78.3% y-o-y to $20,000 mainly due to profits earned by SMG’s associated company, CHA SMG (Australia), and lower losses incurred by the joint venture entity, SMG International (Vietnam). The improvements were offset by the lower profit earned from the joint venture entity, PT Ciputra SMG.

As at end June, cash and cash equivalents stood at $20.3 million.

SMG’s executive director and CEO Beng Teck Liang says, “We witnessed a slowdown from the strong momentum we were garnering up until the period before the onset of COVID-19. Despite the impact, the Group's business operations showed strong resilience while the management team focused on cost controls and improving operational efficiency”.

“Looking ahead into 2H2020, we have seen pent up demand returning for elective procedures and aesthetics. However, uncertainty remains on whether this momentum will continue and if medical tourism will return to pre-COVID-19 levels in the near term,” he adds.

Shares in SMG closed flat at 25.5 cents on August 5.