REPUBLIC HC(08357) - 2020 - 中期财报

Company Information Financial Statements and Summary 2020 Financial Highlights In H1 2020, the company's total revenue decreased by 11.2% to SGD 5.6 million due to COVID-19 and Singapore's 'circuit breaker' measures, primarily from reduced medical examination services, resulting in a net loss of approximately SGD 0.5 million despite a slight gross profit increase Key Financial Indicators for H1 2020 | Indicator | For the six months ended June 30 | Year-on-Year Change | | :--- | :--- | :--- | | Revenue | 5.6 SGD million | -11.2% | | Gross Profit | 4.0 SGD million | +1.4% | | Net (Loss)/Profit After Tax | (0.5) SGD million | Shift from profit to loss | | Interim Dividend | None | No change | - The decline in revenue was primarily due to the COVID-19 pandemic and Singapore's 'circuit breaker' measures, which reduced revenue from medical examination services from SGD 2.0 million in the prior period to SGD 1.4 million[10] - The net loss was mainly attributed to a 41.3% year-on-year increase in employee benefits expenses (approximately SGD 0.8 million) for planned DTAP clinic expansion, alongside operational challenges posed by the pandemic[11] Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2020, the company reported a net loss of SGD 0.577 million, a shift from a net profit of SGD 0.557 million in the prior year, primarily due to decreased revenue and increased employee benefits expenses Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Item | 2020 (Unaudited) | 2019 (Unaudited) | | :--- | :--- | :--- | | Revenue | 5,553,010 SGD | 6,250,853 SGD | | Employee Benefits Expenses | (2,796,456) SGD | (1,979,039) SGD | | Loss/Profit Before Income Tax | (333,137) SGD | 628,184 SGD | | Net Loss/Profit for the Period | (576,744) SGD | 556,884 SGD | | Basic and Diluted Loss/Earnings Per Share | (0.11) Singapore cents | 0.11 Singapore cents | Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2020, total assets decreased to SGD 17.32 million from SGD 18.63 million at year-end 2019, with total liabilities decreasing to SGD 4.70 million and net assets at SGD 12.63 million Summary of Condensed Consolidated Statement of Financial Position | Item | June 30, 2020 (Unaudited) | December 31, 2019 (Audited) | | :--- | :--- | :--- | | Total Assets | 17,324,626 SGD | 18,634,142 SGD | | Total Liabilities | 4,698,385 SGD | 5,421,961 SGD | | Net Assets | 12,626,241 SGD | 13,212,181 SGD | | Cash and Cash Equivalents | 12,073,172 SGD | 5,910,074 SGD | Unaudited Condensed Consolidated Statement of Changes in Equity As of June 30, 2020, total equity decreased from SGD 13.21 million at the beginning of the year to SGD 12.63 million, primarily due to a SGD 0.577 million loss and SGD 0.009 million exchange loss during the period - Total equity attributable to owners of the company decreased from SGD 13,212,181 at the beginning of 2020 to SGD 12,626,241 at the end of the period[17] - The decrease in equity was primarily due to a loss of SGD 576,744 and an other comprehensive income loss (exchange differences) of SGD 9,196 recorded during the fiscal period[17] Unaudited Condensed Consolidated Statement of Cash Flows In H1 2020, net cash outflow from operating activities was SGD 0.755 million, while investing activities generated SGD 7.77 million net cash inflow, primarily from maturing financial assets, increasing period-end cash and cash equivalents to SGD 12.07 million Summary of Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Item | 2020 (Unaudited) | 2019 (Unaudited) | | :--- | :--- | :--- | | Net Cash (Used in)/From Operating Activities | (755,041) SGD | 1,436,291 SGD | | Net Cash From/(Used in) Investing Activities | 7,769,848 SGD | (280,609) SGD | | Net Cash Used in Financing Activities | (851,711) SGD | – | | Cash and Cash Equivalents at End of Period | 12,073,170 SGD | 13,526,025 SGD | Notes to the Unaudited Condensed Consolidated Financial Statements 1 General Information and Reorganization The company, an investment holding company registered in Cayman Islands, primarily operates medical clinics in Singapore and listed on HK GEM in 2018, undergoing internal business reorganization during the reporting period involving clinic acquisitions treated as common control business combinations - The Group primarily operates medical clinics and provides management consultancy services in Singapore[21] - On April 1, 2020, the Group completed several internal acquisitions of clinic businesses, which were accounted for as common control business combinations[23] 2 Basis of Presentation and Accounting Policies These unaudited condensed consolidated financial statements are prepared in accordance with IFRS, applying consistent accounting policies as the 2019 audited statements, with no significant impact from new standards, and Singapore Dollars as the functional and presentation currency - The unaudited condensed consolidated financial statements have been prepared in accordance with all applicable International Financial Reporting Standards (IFRS) and the disclosure requirements of the GEM Listing Rules[24] - The Group's functional and presentation currency is the Singapore Dollar[26] 3 Revenue Total revenue for H1 2020 was SGD 5.55 million, a 11.2% year-on-year decrease, primarily driven by a significant decline in medical examination services revenue from SGD 2.02 million to SGD 1.42 million Revenue Analysis by Business Activity (For the six months ended June 30) | Type of Medical Service | 2020 (Unaudited) | 2019 (Unaudited) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Treatment Services | 3,576,321 SGD | 3,613,779 SGD | -1.0% | | Medical Examination Services | 1,416,469 SGD | 2,020,776 SGD | -29.9% | | Consultation Services | 560,220 SGD | 616,298 SGD | -9.1% | | Total | 5,553,010 SGD | 6,250,853 SGD | -11.2% | 4 Income Tax Expense For the six months ended June 30, 2020, the Group's current income tax expense was SGD 0.244 million, an increase from SGD 0.071 million in the prior year, with Singapore corporate income tax rate at 17% - Current Singapore income tax for the six months ended June 30, 2020, was SGD 243,607, compared to SGD 71,300 for the same period in 2019[49] 5 Loss/Earnings Per Share For the six months ended June 30, 2020, basic and diluted loss per share was 0.11 Singapore cents, a shift from earnings per share of 0.11 Singapore cents in the prior year, calculated based on 520 million weighted average ordinary shares Loss/Earnings Per Share Calculation | Item | For the six months ended June 30 (2020) | For the six months ended June 30 (2019) | | :--- | :--- | :--- | | (Loss)/Profit Attributable to Owners of the Company | (585,940) SGD | 556,884 SGD | | Weighted Average Number of Ordinary Shares | 520,000,000 | 520,000,000 | | Loss/Earnings Per Share (Singapore cents) | (0.11) | 0.11 | Notes to Key Financial Statement Items This section details changes in key balance sheet items, including property, plant and equipment, right-of-use assets, receivables, payables, and cash 6 Property, Plant and Equipment As of June 30, 2020, the net book value of property, plant and equipment decreased to SGD 0.558 million from SGD 0.695 million at the beginning of the year, primarily due to SGD 0.217 million in depreciation during the period - As of June 30, 2020, the net book value of property, plant and equipment was SGD 558,398, lower than SGD 694,504 at the beginning of 2020[55][57] 7 Right-of-Use Assets and Lease Liabilities As of June 30, 2020, right-of-use assets had a book value of SGD 1.93 million and lease liabilities were SGD 1.77 million, primarily related to the Group's leased office and clinic units - As of June 30, 2020, the book value of right-of-use assets was SGD 1,928,952, and the book value of lease liabilities was SGD 1,772,129[59] 8 Trade and Other Receivables Trade receivables increased from SGD 0.094 million at the beginning of the year to SGD 0.126 million, while current deposits, prepayments, and other receivables significantly rose from SGD 0.765 million to SGD 2.02 million - Trade receivables increased from SGD 94,082 at the end of 2019 to SGD 125,800 as of June 30, 2020[60] 12 Cash and Cash Equivalents As of June 30, 2020, total cash and cash equivalents significantly increased to SGD 12.07 million from SGD 5.91 million at the end of 2019 - Cash and cash equivalents significantly increased from SGD 5,910,074 at the end of 2019 to SGD 12,073,172 as of June 30, 2020[65] 14 Trade and Other Payables Trade payables increased from SGD 0.795 million at the beginning of the year to SGD 0.857 million, while accrued expenses and other payables rose from SGD 0.706 million to SGD 0.861 million - Trade payables increased from SGD 794,940 at the end of 2019 to SGD 857,350 as of June 30, 2020[68] Share Capital and Dividends As of June 30, 2020, the company had 520 million issued ordinary shares with a share capital of SGD 0.897 million, and the Board resolved not to declare an interim dividend for the period - As of June 30, 2020, the company had 520,000,000 issued and fully paid ordinary shares[70] - The Board has resolved not to declare an interim dividend for the period, consistent with the prior year[71] 18 Related Party Transactions During the reporting period, total remuneration paid to key management significantly increased to SGD 0.301 million from SGD 0.170 million in the prior year, primarily due to higher salaries, allowances, and benefits in kind Key Management Remuneration (For the six months ended June 30) | Item | 2020 (Unaudited) | 2019 (Unaudited) | | :--- | :--- | :--- | | Salaries, Allowances and Benefits in Kind | 217,609 SGD | 77,652 SGD | | Directors' Fees | 72,000 SGD | 82,033 SGD | | Contributions to Defined Contribution Plans | 11,278 SGD | 9,860 SGD | | Total | 300,887 SGD | 169,545 SGD | Management Discussion and Analysis Business Review and Outlook The company, a leading general medical network in Singapore operating under the 'DTAP' brand, experienced an 11.2% year-on-year revenue decline in H1 2020 due to COVID-19 'circuit breaker' measures, but plans to expand market share and strengthen its brand despite ongoing pandemic uncertainties - Revenue for H1 2020 decreased by 11.2% year-on-year to approximately SGD 5.6 million, primarily impacted by the COVID-19 pandemic and 'circuit breaker' measures in Singapore[77] - Looking ahead, the pandemic outbreak presents uncertainties and operational challenges for clinics, but the Group will continue to seek market share expansion and enhance the DTAP brand and business[78] - As of the reporting date, the Group operates 9 clinics, with another one awaiting approval from the Ministry of Health[80] Financial Review H1 2020 revenue decreased by 11.2% to SGD 5.6 million due to reduced medical examination services, while gross profit margin improved from 62.9% to 71.8% as high-cost services declined, but a 41.3% increase in employee benefits expenses for planned expansion led to a net loss of approximately SGD 0.6 million - Revenue decreased by 11.2% from SGD 6.3 million in the prior period to SGD 5.6 million in the current period, primarily due to the impact of COVID-19 and 'circuit breaker' measures[81] - Gross profit margin increased from 62.9% in the prior period to 71.8% in the current period, mainly due to a 58.6% significant reduction in medical professional costs resulting from changes in service mix[83] - Employee benefits expenses increased by 41.3% year-on-year (approximately SGD 0.8 million), primarily attributed to the recruitment of new staff for the planned expansion of DTAP clinics[84] - The period recorded a loss of approximately SGD 0.6 million, compared to a profit of approximately SGD 0.6 million in the prior period, mainly due to pandemic challenges and increased employee benefits expenses[87] Liquidity and Capital Resources The company's working capital is primarily derived from internal cash flow, with cash and cash equivalents of approximately SGD 12.1 million and no bank borrowings as of June 30, 2020, resulting in a decrease in the capital gearing ratio from 18.6% to 14.0% Liquidity and Capital Gearing Ratio | Indicator | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 12.1 SGD million | 5.9 SGD million | | Bank Borrowings | None | None | | Capital Gearing Ratio | 14.0% | 18.6% | Use of Proceeds Of the approximately SGD 9.1 million net proceeds from the company's listing, SGD 2.14 million had been utilized as of June 30, 2020, with some expansion plans, such as new 'DTAP' and 'SA' clinics, delayed due to the pandemic and market conditions Use of Net Proceeds from Listing (As of June 30, 2020) | Purpose | Net Proceeds from Listing (SGD thousands) | Amount Utilized (SGD thousands) | Balance (SGD thousands) | | :--- | :--- | :--- | :--- | | Expansion of DTAP Clinic Network | 2,600 | 572 | 2,028 | | Establishment of New SA Clinics | 1,400 | 173 | 1,227 | | Attracting and Retaining Talent | 4,300 | 1,091 | 3,209 | | Enhancing IT Infrastructure | 600 | 205 | 395 | | Establishing Central Pharmacy | 100 | – | 100 | | General Working Capital | 100 | 100 | – | | Total | 9,100 | 2,141 | 6,959 | - Plans to open new 'DTAP' clinics were postponed due to availability of leased space, while plans for new 'SA' clinics were delayed until H2 2022 due to market saturation in Singapore's aesthetic clinic sector[108] Corporate Governance and Other Information Corporate Governance Practices The company complied with all applicable provisions of the GEM Listing Rules' Corporate Governance Code during the reporting period, adopted a code of conduct for directors' securities transactions, and confirmed no share options have been granted since the adoption of the share option scheme - The company has adopted and complied with all applicable code provisions of the Corporate Governance Code in Appendix 15 to the GEM Listing Rules during the period[113] - No share options have been granted or agreed to be granted by the company since the adoption of the share option scheme up to the date of this report[115] Directors' and Shareholders' Interests As of June 30, 2020, Dr. Chan Cher Sen, Chairman and Executive Director, held 390 million shares, representing 75% of the issued share capital, through his wholly-owned company Cher Sen Holdings Limited, making him the controlling shareholder - Dr. Chan Cher Sen, Chairman and Executive Director, is deemed to have an interest in 390,000,000 shares held by his wholly-owned company, Cher Sen Holdings Limited, representing 75% of the company's issued shares[117][118] - Cher Sen Holdings Limited, as beneficial owner, holds a long position of 390,000,000 shares in the company, representing 75%[122] Audit Committee Review The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited condensed consolidated financial statements and this interim report, confirming their preparation in compliance with applicable accounting standards and listing rules, with sufficient disclosures - The Audit Committee, composed of three independent non-executive directors, has reviewed the unaudited condensed consolidated financial statements and this report[129] - The Audit Committee believes that these statements and the report have been prepared in compliance with applicable accounting standards, GEM Listing Rules, and other legal requirements, with adequate disclosures[129]