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Half Year Financial Statements Announcement for the 6 months ended 30 June 2017

Financials Archive

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An income statement and statement of comprehensive income, or a statement of comprehensive income, for the group, together with a comparative statement for the corresponding period of the immediately preceding financial year.

Consolidated Income Statement

Statement Of Comprehensive Income For Half Year Ended 30 June 2017

Statement Of Comprehensive Income For Full Year Ended 30 June 2017

Balance Sheet

Review of Performance

The Group's revenue decreased by S$667,000 or 6% from S$10.6 million for the half year ended 30 June 2016 ("1H 2016") to S$10 million for the half year ended 30 June 2017 ("1H 2017"). The decrease was due mainly to lower revenue from the imaging business as a result of increased competition and lower specialist visitations by private patients.

Other income decreased from S$699,000 in 1H 2016 to S$187,000 in 1H 2017 due mainly to lower rental income and government grants received.

Total operating expenses decreased by S$441,000 or 4%. Personnel expenses decreased by S$182,000 or 3% due mainly to lower headcount. Depreciation decreased by S$53,000 or 7% due mainly to medical equipment being fully depreciated. Laboratory and consultancy fees decreased by S$146,000 or 15% and other operating expenses decreased by 8% or S$111,000 in line with the decrease in revenue. Finance costs decreased by S$26,000 or 35% due to the repayment of loans and finance lease obligations. The increase in maintenance of equipment expenses of S$67,000 or 20% was due to the expiry of the warranty period of medical equipment acquired in previous years. The share of results of associate decreased by S$51,000 or 28% due to its lower sales and hence, profit.

As a result of the lower volume of the imaging business and other income, the Group recorded a loss of S$956,000 in 1H 2017 compared with a loss of S$167,000 in 1H 2016.

Non-Current Assets

Non-current assets decreased from S$11.6 million as at 31 December 2016 to S$10.9 million as at 30 June 2017 due mainly to depreciation of property, plant and equipment.

Current Assets

Current assets decreased from S$9.6 million as at 31 December 2016 to S$8 million as at 30 June 2017 due mainly to the decrease in cash and short term deposits, partially offset by the increase in trade receivables. Cash and short term deposits decreased from S$7.1 million as at 31 December 2016 to S$5.2 million as at 30 June 2017. Trade receivables increased from S$0.9 million as at 31 December 2016 to S$1.2 million as at 30 June 2017 due mainly to the health screening projects.

Current Liabilities

Current liabilities decreased from S$6.3 million as at 31 December 2016 to S$5.4 million as 30 June 2017 due mainly to decrease in put option liabilities of S$0.8 million. The Group settled the put option liabilities in 1H 2017. The increase in trade payables from S$1.1 million as at 31 December 2016 to S$1.3 million as at 30 June 2017 was due to the timing of payments. Obligations under finance leases decreased from S$1.2 million as at 31 December 2016 to S$1 million as at 30 June 2017 due to repayments made by the Group.

Net Current Assets

Net current assets decreased from S$3.3 million as at 31 December 2016 to S$2.6 million as at 30 June 2017.

Non-Current Liabilities

Non-current liabilities decreased from S$1.5 million as at 31 December 2016 to S$1.1 million as at 30 June 2017 due to repayments of loans and borrowings and obligations under finance leases.

Cash Flow

The Group has a cash outflow from operating activities of S$538,000 in 1H 2017 compared with an inflow of S$885,000 in 1H 2016 due mainly to higher operating loss. The increase in cash flows used in investing activities from S$190,000 in 1H 2016 to S$514,000 in 1H 2017 was due mainly to the purchase of minority interests' stakes following the exercise of put options by them. Cash flows from financing activities decreased as there was a private placement in the previous year.

Commentary

The operating environment of the Group continues to be challenging. In view of this, the Group has taken initiatives to enhance operational efficiencies and manage operating costs to remain competitive. As announced by the Company on 20 April 2017, the Company has entered into a sale and purchase agreement for the proposed acquisition of the entire share capital of LuyeEllium Healthcare Co., Ltd, a South Korean medical services company that provides hospital management and consultancy services to hospitals in South Korea and China, and also owns and operates a post-partum care centre in Busan, South Korea (the "Proposed Acquisition"). The Company will release such further announcements, in compliance with the requirements of the Catalist Rules, when there are material updates or developments in respect of the Proposed Acquisition.