RAFFLES Medical Group (RMG) executive chairman Loo Choon Yong says he is ‘happy to lose’ the tender for a hospital site at Novena, seeing the record bid of $1,600 psf per plot ratio (ppr) by Parkway Holdings makes the site one of the most expensive commercial land buys in recent times.
‘This is one tender we are quite happy to lose,’ said Dr Loo. ‘As you can see, it’s a different risk appraisal, I suppose.’ Related links: Click here for Raffles Medical’s press release Financial statement The tender for the Novena site closed last Friday. At $344.1 psf ppr, RMG’s bid fell a long way short of even the $694.5 psf ppr put in by second-highest bidder Napier Medical. The site was awarded to Parkway yesterday afternoon.
Although it missed out, RMG intends to keep looking for opportunities to grow locally. ‘We can of course move out backroom services,’ said Dr Loo. ‘We can move out even my office and use every square inch to serve patients.’
At the rate business is growing, it may not be long before that happens. RMG announced yesterday its full-year net profit more than doubled to $35.9 million, from $15.7 million in FY2006. This was helped by a 46.9 per cent or $9 million rise in operating profit to $28.2 million and a one-time gain of $12.5 million from its 50 per cent interest in Raffles Hospital Properties . The gain resulted from a revaluation of the Raffles Hospital building, which RMG previously co-owned with a CapitaLand unit.
Revenue for the 12 months ended Dec 31, 2007, jumped 25.6 per cent to $168.7 million. This was driven largely by hospital services which saw revenue surging 34.3 per cent to $106.3 million. The increasing complexity of cases resulted in more intensive use of facilities and higher value-added services.
According to Dr Loo, the hospital is operating at 40-60 per cent capacity, with some of the bed space making way for outpatient operations.
The healthcare services segment, which encompasses the clinics business, grew 14.4 per cent to $69.7 million. During the year, the group opened three new clinics - at Science Park, TechPark, TechPlace and a 24-hour medical centre in Terminal 3 of Changi Airport.
Basic earnings per share for the year went up to 7.36 cents, from a restated 3.50 cents the year before. Net asset value per share was 38.98 cents at Dec 31, up from 24.87 cents at end-2006. The group is proposing a final dividend of 1.5 cents a share, bringing the payout for the year to 2.5 cents a share.
Dr Loo is optimistic about the group’s prospects in 2008 but says the state of the global economy is important. ‘Because we are actually serving regional patients, if they do less well, they may be less inclined to come,’ he said. ‘Singaporeans will always have the option of going to government hospitals.’
More than one-third of RMG’s patients are from overseas, with the top sources being Indonesians, Malaysians and expatriates living in the region.
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