- We cut our 2024F–2025F earnings forecast for Raffles Medical (SGX:BSL) by 7-8% following weak 2H23 results. Although Raffles Medical's revenue and reported PATMI were in line, recurring PATMI was lower.
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- Still, risks from higher-than-estimated operating costs, likely weak foreign patient load, and continuing losses from the insurance business persist. We await clarity on sequential earnings improvement in the coming quarters.
In-line reported numbers for 2023.
- Raffles Medical's revenue of S$706.9m (-14% y-o-y) was in line with our estimate. Reported PATMI of S$90.2m (-42% y-o-y) also met our estimate while recurring PATMI of S$74.5m (-46% y-o-y) missed. The hospital services division saw a sharp improvement in PBT for the 2023 and 2H23 periods amidst improved patient load in Singapore and the ramping up of operations in China, leading to y-o-y lower gestational losses.
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- Healthcare services continued to see a decline in PBT due to a lack of revenue from COVID-19 activities.
- Maintaining a 50% payout ratio, Raffles Medical announced a final ordinary dividend of 2.4 cents.
Growth outlook filled with risks.
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