FY21 Results Analysis: One of its record-high year.
- FY21 recorded one of its best ever results with strong contributions from COVID-19 related services and recovery getting closer / above pre-COVID levels, above our estimates
- Key positives: i) continued support in COVID-19 related services though changing according to the development of the COVID-19 situation, ii) both healthcare and hospital services revenue are above pre-COVID, iii) FY21 dividend is above previous commitment.
- Key negatives: i) 2H21 hospital services revenue fell 6% y-o-y.
- BUY rating; TP of S$1.81
| S$’m | 2H2021 | 2H2020 | % y-o-y | 1H2021 | % h-o-h | FY2021 | FY2020 | % y-o-y |
| Revenue | 380.0 | 326.8 | 16.3% | 343.8 | 10.5% | 723.8 | 568.2 | 27.4% |
| EBITDA | 86.1 | 82.1 | 4.9% | 74.5 | 15.6% | 160.6 | 123.9 | 29.6% |
| PAT | 44.8 | 48.6 | -8.0% | 39.4 | 13.5% | 83.7 | 64.7 | 29.5% |
| PATAMI | 44.7 | 48.6 | -8.1% | 39.4 | 13.4% | 84.2 | 65.9 | n/a |
Source: Company, DBS
FY21 recorded one of its best results with strong contributions from COVID-19 related services and recovery getting closer or above that of pre-COVID levels
- Raffles Medical’s FY21 PAT grew 30%y-o-y to S$84m, above our estimates, recording one of its best results. The strong results were led by contributions from COVID-19 related services, partially offset by lower government grants such as Job Support Scheme (JSS) and property tax rebate.
- 2H21 PAT fell 8% y-o-y to S$45m (+14% h-o-h) mainly due to lower government grants such as JSS.
- 2H21 Revenue grew 16% y-o-y to S$380m led by growth in both healthcare services (+61.3% y-o-y) but hospitals services fell 6% y-o-y.
- More importantly, we note that healthcare services has doubled that of pre-COVID (2H19 revenue) while hospital services is c.10% above pre-COVID.
- Similar trends observed, 2H21 EBTIDA +5% y-o-y to S$86m, 52% above pre-COVID level (2H19 EBITDA).
- 2H21 EBITDA margins at 23%, slightly higher compared to 1H21 and 2H19 possibly due to higher margins from COVID-19 related services.
- 2H21 revenue from Singapore and Greater China grew 16% y-o-y and 33% y-o-y respectively while the rest of Asia fell 10% y-o-y.
- Raffles Medical declared 2.8 Scts final dividend per share (1.8 Scts core + 1.0 Scts special) above previous commitment of at least 2.5 Scts of dividend per share.
Key business updates – Continued support on COVID-19 initiatives in both Singapore and China; management is cautiously optimistic on the return on foreign patients; RafflesHospitalShanghai opened in July21.
- In Singapore, Raffles Medical continue to support the government’s COVID-19 initiatives. The continued support includes i) pivoted to providing booster shots and paediatric vaccinations, ii) extensive community PCR testing during the Delta-strain wave, iii) air-border screening and pre-departure testing for travellers, iv) operating community treatment facilities for COVID-19 patients, and v) step-up to take in additional patients needing emergency care to support public hospitals under the Emergency care Collaboration when the need arises.
- Given some relaxation of travel borders, Raffles is cautiously optimistic that foreign patients will be able to resume seeking treatment in Singapore.
- In China, Raffles continues to participate in the government’s COVID-19 vaccination and community testing efforts given the continued sporadic COVID-19 clusters.
- Raffles Hospital Shanghai opened in July2021.