The earnings decline comes despite a 7.8% rise in 3Q19 revenue to $130.5 million, from $121.0 million a year ago.
The higher revenue was driven by more insurance contracts and corporate clients from the Healthcare Services division and increased patient load from the Hospital Services division.
However, Raffles Medical’s bottom-line was hit by an 8.8% increase in staff costs to $67.9 million, a 26.1% increase in purchased and contracted services to $13.5 million, and a 51.6% jump in depreciation of property, plant and equipment to $6.8 million.
More purchased and contracted services were mainly attributed to higher insurance claims in tandem with increased insurance premiums, while depreciation increased mainly due to the recognition of right-of-use assets as a result of the adoption of the new accounting standard.
The group also recorded a 29.9% rise in other operating expenses to $8.6 million, driven by increased advertising and marketing expenses as well as building and related expenses relating to the Raffles Specialist Centre and Raffles Hospital Chongqing.
As at end-September, cash and cash equivalents stood at $116.9 million.
Looking ahead, the group says recruitment of the RafflesHospital Shanghai opening team has begun, with the interior fit-out and purchase of major equipment now underway.
Despite gestation losses for RafflesHospital Chongqing, the group says it expects to remain profitable in 2019.
As at 12.30pm, shares in Raffles Medical Group are trading half a cent lower at 99.5 cents.
