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Econ Healthcare posts $1.26 mil loss for 2HFY2022 after losing $3.4 mil on Crosstech exit

·3-min read

Econ Healthcare's total revenue for the FY2022 stood 3.3% higher y-o-y at $38.9 million.

Catalist-listed Econ Healthcare (Asia) has posted a loss of $1.26 million for 2HFY2022 ended March 31, reversing from a net profit of $2 million in the same period last year.

The loss was mainly due to the decrease in other income which comprise mostly of grants; loss on disposal of Crosstech Group Holdings shares; as well as expenses incurred for the closure of ECON Medicare Centre and Nursing home - Pudu.

This brings the loss per share to 49 cents, from the previous 99 cents.

Econ Healthcare had spent $4 million to buy 11.8 million shares of Crosstech, a Hong Kong-listed interior designer before the latter’s share price plunged 84% on Jan 11.

On Jan 12, the nursing home operator announced that it has sold all its shares and will book a loss of investment of $3.4 million.

Econ Healthcare's total revenue for the FY2022 stood 3.3% higher y-o-y at $38.9 million. This was due to an increase in revenue of $1.5 million for Medicare centres and nursing home fees, offset by a decrease in ancillary fees of $300,000.

Singapore Medicare centres and nursing home — its largest revenue-generating unit — contributed increased revenue of $1.6 million as a result of overall rise in bed occupancy for the year, fee adjustment and improvement in Econ Healthcare’s homecare business.

In Malaysia, the opening of the ECON Medicare Centre and Nursing Home in Puchong in December 2020 contributed increased revenue of $1 million. Meanwhile, its newest nursing home in China — the Chongqing Nursing home which opened in May 2021 with 44 beds contributed $300,000 to the increase in revenue.

Overall, Econ Heaklthcare's occupancy rate had increased to 84.2% in FY2022 from 81.2% in FY2021.

Other income decreased by $1.3 million to $5.2 million in FY2022, mainly due to decrease in the Job Support Scheme grants and foreign worker levy rebates of $1.8 million; as well as the staff accommodation grants of $1.6 million.

The decrease was partially offset by increase in new grants, such as $400,000 Job Growth Incentives grants and $400,000 Eldercare centre baseline service grants.

Other operating expenses decreased by 2.2% to S4.7 million in FY2022. This was due to the absence in fees of $1.6 million that the company incurred for IPO project in FY2021.

Cash and cash equivalents stood at $26.1 million as at March 31. The company has not proposed a final dividend in respect of FY2022 but had paid an interim dividend of 0.22 cents per ordinary share in December 2021.

With the Covid-19 situation easing in Singapore and Malaysia, Econ Healthcare is cautiously optimistic that it can achieve organic growth, especially with a number of new nursing homes in its pipeline.

Its executive chairman and group CEO Ong Chu Poh said the company’s services are increasingly needed with a rapidly aging population across all three of its markets. “As such, we believe the prospects of our business are positive and we will continue to develop new concepts that will keep our residents healthy and happy.”

Shares in Econ Healthcare closed 0.5 cents higher or 1.96% up on May 27 at 26 cents.


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