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Extracted from Annual Report 2017

Message from our CEO

Geopolitical and economic uncertainties ensued in 2017, which presented muted growth. Despite this, we seized the opportunity to revamp ourselves through organisational restructure, so as to reposition ourselves to capitalise on the first sign of recovery.

BUSINESS CONDITIONS IN 2017

The business environment remained challenging in FY2017. All our business segments faced demanding conditions that affected our results. There was intense competition seen in our imaging business that led to lower sales volume and prices. This was further compounded by a high turnover of in-house radiologists.

On the other hand, our wellness (health screening) business segment delivered strong performance as we managed to renew our existing Health Promotion Board ("HPB") contracts, while securing more new accounts.

Overall, we reported lower revenue from our imaging business and impairment of property, plant and equipment led to a loss of S$4.2 million recorded for FY2017 against a loss of S$1.6 million for FY2016.

PERFORMANCE REVIEW

For the financial year ended 31 December 2017 ("FY2017"), the Group's revenue decreased by 8% from S$20.6 million for the financial year ended 31 December 2016 ("FY2016") to S$19.0 million. This was mainly due to lower revenue contribution from the imaging business, which was partially offset by an increase in revenue from the wellness business. Concurrently, other income fell by 61% in FY2017 as caused by lower sub-lease and grant income.

In line with the reduced revenue, consumables expenses lowered by 7% to S$2.1 million in FY2017, while personnel expenses fell by 7% to S$10.9 million in the same year due to more efficient manpower rationalisation. Depreciation expenses dipped by 7% to S$1.5 million as a result of fixed assets being fully depreciated and maintenance of equipment expenses rose by 19% due to the expiry of the warranty period of equipment acquired in previous years. Finance costs lowered by 40% mainly due to the settlement of hire purchase liabilities and bank loans.

Separately, other operating expenses increased by 9% mainly attributed to expenses incurred in relation to the proposed acquisition of LuyeEllium Healthcare Co., Ltd ("LuyeEllium") at S$598,000. The impairment of S$1.5 million recorded in FY2017 related mainly to the property, plant and equipment of the imaging business.

After taking into account the above factors, the Group recorded a loss of S$4.2 million for FY2017 as compared to a loss of S$1.6 million for the previous year.

As at 31 December 2017, cash and short-term deposits remained positive at S$3.2 million as compared to S$6.9 million as at 31 December 2016.

IN APPRECIATION

I would like to take this opportunity to express my appreciation to the Board of Directors for their contribution and guidance that has steered the Group through these challenges. I would also like to thank our shareholders, customers and business associates for their support and faith in us throughout the years. Last but not least, I would like to acknowledge the hard work and dedication of our management and staff for keeping the Group on course. Together, we will continue on this journey towards greater success in the years to come.

CHOO KIN POO
Chief Executive Officer