Raffles Medical - CGS-CIMB Research 2023-11-07: A Confluence Of Headwinds In 3Q23

• Raffles Medical (SGX:BSL)'s 3Q23 profit after tax (PAT) declined 67.4% y-o-y to S$12.4m, which was lower than the $13.6m in 3Q19 (pre-COVID-19).

Only revenue and PAT disclosed for 3Q23

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• Raffles Medical's management cited incremental gestational losses at its Shanghai hospital that only had started operations in Jul 2021 as the key reason for the subdued 3Q23 PAT vs 3Q19, while the drastic decline in PAT y-o-y from S$38.0m was underscored by the reduction in COVID-19 related revenues and higher-than-expected insurance claims at its health insurance arm Raffles Health Insurance (RHI) in 3Q23.

Reduced COVID-19 related activities drove lower profitability in Singapore

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• Today, Raffles Medical no longer operates any joint vaccination and testing centres (JVTCs), and its transitional care facility (TCF) at the Changi Expo is providing stepped down care, likely less profitable vs when the facility was receiving COVID patients.

Rationalising operations in China

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TAY Wee Kuang CGS-CIMB Research | https://www.cgs-cimb.com 2023-11-07 SGinvestors.io

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