Revenue growth for Healthway as it narrows net loss attributable to shareholders - 2018 Annual Report
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Healthway Medical Corporation Limited (Healthway)
Source: Healthway
Healthway is a private healthcare provider, with a network of 97 clinics and medical centres across Singapore, including many major private hospitals. The company offers many services including GP & family medicine clinics, health screening, adult specialists, baby & child specialists, dental and allied healthcare services.
FY 2018 Financial Highlights:
Source: Healthway FY 2018 Annual Report
- Healthway experienced a 7.5% year-on-year increase in revenue to SGD 112.7 million in FY 2018, while other operating income grew by 17.5% to SGD 2.0 million.
- Total operating costs for FY 2018 declined by 12.7% to SGD 120.2 million, while finance costs dropped by 87.0% to SGD 0.38 million.
- Consequently, Healthway’s net loss attributable to shareholders for FY 2018 was SGD 5.8 million – an improvement when compared to the net loss attributable to shareholders of SGD 34.8 million in FY 2017.
Performance Drivers:
Source: Healthway FY 2018 Annual Report
After exiting the Wellness Healthcare segment in Q3 2018, Healthway now has two strategic business units: the Primary Healthcare segment and the Specialist Healthcare segment. The company’s increased turnover in FY 2018 came on the back of higher sales from both these segments.
Performance Drivers (Positive Factors)
- Primary Healthcare segment
Healthway’s Primary Healthcare segment comprises family medicine, dentistry, healthcare benefit management and investment in strategic medical related business.
Revenue for the Primary Healthcare segment rose by 10.4% year-on-year in FY 2018 to SGD 56.4 million. Meanwhile, EBITDA improved by 53.0% from the negative earnings of SGD 7.6 million in FY 2017, to a negative SGD 3.6 million in FY 2018. This improvement was primarily due to the absence of an allowance for impairment of loss for intangible assets of SGD 4.5 million, which was recorded in FY 2017.
- Specialist Healthcare segment
Healthway’s Specialist Healthcare comprises pediatrics, orthopedics, aesthetic medicine, obstetrics and gynecology and Nobel specialist comprising cardiology, gastroenterology, psychiatry, eye, ear, nose and throat and general surgery.
Revenue for the Specialist Healthcare segment increased by 4.7% year-on-year in FY 2018 to SGD 56.3 million. The segment’s EBITDA surged from a negative SGD 20.4 million in FY 2017 to a positive SGD 59,000 in FY 2018. This hike in EBITDA for the Specialist Healthcare segment was largely due to the absence of an allowance for impairment loss for intangible assets of SGD 20.5 million, which was recorded in FY 2017
- Other Operating Income
Healthway’s other operating income grew by 17.5% to SGD 2.0 million in FY 2018 – on the back of higher government grants of SGD 0.4 million (Wage Credit Scheme and Special Employment Credit), as well as a SGD 0.2 million increase in rental income.
Meanwhile, finance costs dropped by 87.0% mainly due to lower interest costs from the conversion of convertible notes and repayments made.
Performance Drivers (Negative Factors)
- Wellness Healthcare segment
As part of Healthway’s ongoing business optimisation strategy to review the performance of all business units, the company decided to exit from the Wellness Healthcare segment in Q3
2018 and focus their efforts on its other business units. Healthway exited this segment at a loss of SGD 0.1 million.
Source: Healthway FY 2018 Annual Report
