- Raffles Medical (SGX:BSL)'s FY22 earnings beat on well-managed staff costs, at 117.6%/121.3% of our/consensus estimates on an 8.2% pt expansion in EBITDA margins.
- Management highlighted that the decline in staff costs was from right-sizing staffing across expanded operations in hospitals, clinics and the transitional care facility (TCF) in Connect@Changi (previously a COVID-19 treatment facility). This led to staff costs coming in at 37.9%/44.6% of 2H22/FY22 revenues despite historical average of above ~50%.
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- As Raffles Medical pivots back to its core hospital and healthcare services business, we believe staff costs will revert to historical levels of ~50% of revenues, especially as Raffles Medical steps up operations in China after the border reopening.
- Raffles Medical (SGX:BSL)'s FY22 earnings beat on well-managed staff costs, at 117.6%/121.3% of our/consensus estimates on an 8.2% pt expansion in EBITDA margins.
- Management highlighted that the decline in staff costs was from right-sizing staffing across expanded operations in hospitals, clinics and the transitional care facility (TCF) in Connect@Changi (previously a COVID-19 treatment facility). This led to staff costs coming in at 37.9%/44.6% of 2H22/FY22 revenues despite historical average of above ~50%.
- Stepping down COVID-19-related services also meant an easing of manpower, as Raffles Medical was managing more than 2.8k permanent staff and 5k part-timers at its peak.
- As Raffles Medical pivots back to its core hospital and healthcare services business, we believe staff costs will revert to historical levels of ~50% of revenues, especially as Raffles Medical steps up operations in China after the border reopening.
- Raffles Medical saw revenue grow 5.9% to a record S$766.5m in FY22, supported by COVID-19 facilities, and the return of both local and foreign patients. Record revenue in FY22 is hard to top –
- Read more at SGinvestors.io.
