Raffles Medical Group posted a 2% growth in PBT for its Q3 2015. 9M2015 PBT was growing at 2.5%.
That seem like mature company's growth rate. Or is it?
Profit before tax for RMG was affected by 3 main reasons:
- Higher Staff costs (10% growth)
- Higher depreciation (38% growth)
- Higher operating lease expense (22% growth)
Building the foundation for bigger things
RMG's higher staff costs was due to annual increment and
higher headcount for new clinics.
RMG's higher depreciation due to conversion of previously leased space to specialist centres (for RMG own use) to meet growing patients' demand, and buying of medical equipments.
RMG's higher operating lease expense due to expansion of new clinics.
READ: Laying foundations for higher revenue in the future.
The higher expenses all relate to
expansions and also
generates revenue (compared to inflationary cost pressure)
Other catalysts intact
- Acquired ISOS -> Now owns 10 clinics in China, ...
...