AsiaMedic
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Email This Print ThisChairman's Statement

Extracted from Annual Report 2017

Dear Shareholders,

2017 remained a challenging year for AsiaMedic as the Singapore's private healthcare industry faced intense headwinds. As a result of the tough business environment, the Group's revenue decreased by 8% to $19 million and incurred a net loss of $4.2 million in FY2017.

IMAGING BUSINESS

The net loss was mainly attributed to the performance of the imaging business. During the year, there was a general decline in the number of overseas patients for our imaging business, in particular, the Indonesian patients. We also faced competition from new imaging centres which were eager to establish foothold and market share with newer machines and lower pricing. In addition to the operating loss, the Group recorded an impairment of $1.5 million for property, plant and equipment in FY2017. The bulk of which relates to the medical equipment of the imaging business, as the utilisation rate of the medical equipment dropped in line with the poorer performance of the imaging business. To avoid similar situation in FY2018, we have expanded our offerings to include MRI breast sub-specialisation. Our imaging business has also forged partnerships with a few other imaging groups in a move to enhance our sub-specialisation profile, achieve cross coverage of services and boost service sustainability and service continuity. We also intend to secure more imaging referrals from specialist clinical businesses owned by our controlling shareholder, Luye Medical Group Pte Ltd.

WELLNESS BUSINESS

Our wellness business delivered encouraging results in FY2017. On the back of our strong branding and track record, we have completed several new health screening contracts during the year. With this development, we are well-poised to scale up our business as we execute our strategic plan to explore new opportunities of introducing new services to the market. Leveraging on our onsite project experience, we were able to apply what we have learnt to provide improved business operations in the form of quality service. With a competent project team in place, we look forward to providing an enlarged suite of services.

OTHER BUSINESSES

Our other businesses, Complete Healthcare International Clinic ("CHI") and Astique The Aesthetic Clinic ("Astique"), have expanded its service offerings. In particular, CHI started the mother and baby wellness service as a sign of our interest to venture into this arena. We will also start to provide night clinic services as part of the package. Meanwhile, Astique enhanced its machines and equipment to deliver better cool sculpting services for patients.

FUTURE OUTLOOK

We have developed a three-year plan in FY2017 to help us navigate better in the current operating environment. During the year, we reviewed our processes and systems to work towards streamlining. With an aim to reduce wastage, we adopted a leaner organisational structure to allow the Group to be more nimble in reacting to market challenges and capitalise on available opportunities.

To date, we have completed our first phase of restructuring with a new team being put in place. The new team of professionals who are innovative, business-oriented and aligned with our business objectives will provide a refreshing approach and effective strategies to see the Group through our exploration of new target markets and expansion of alternative service lines.

In FY2017, the biggest challenge posed by the competitive healthcare market was delivering high quality services at lower prices alongside rising operating costs. As the market share of patients reduced due to a declining inflow of overseas patients, there was a rising demand for service providers to deliver quality services swiftly to suit the growing needs. In view of this shift in trend, we have made it our organisational focus in FY2017 to review and restructure the Group's business through revamping our business profile, service culture, human resource practices, organisational framework and introduce new service lines. In doing so, we are preparing the Group for new challenges in the future.

As part of our restructuring plan, we started a new service culture that is aimed at improving service delivery standards within the Group for the purpose of attracting and retaining customers. We will be integrating staff training into our key plans, so as to equip our employees with new skills to keep abreast with the market.

Where our financials are concerned, we will make every effort to evaluate necessary funding options including but not limited to, loans from the Group's controlling shareholder as well as potential fund-raising exercise to strengthen our balance sheet and provide the financing needed to explore investment opportunities.

Additionally, we have extended our long-stop date for the proposed acquisition of LuyeEllium Healthcare Co., Ltd to 31 August 2018. We will update shareholders accordingly on the progress of this acquisition.

ACKNOWLEDGEMENTS

I would like to thank the Board of Directors, our management and staff for their commitment and hard work that has kept the Group on course. I would also like to extend my gratitude to our business associates, patients and shareholders for their unwavering support all these years. We look forward to moving ahead together with exciting developments in the near future.

TAN SOO KIAT
Non-Executive Chairman