REPUBLIC HC(08357) - 2022 Q1 - 季度财报

Q1 2022 Financial Highlights Financial Summary The Group's Q1 2022 saw a significant financial decline, with revenue down 47.9% and gross profit down 49.5% year-on-year, leading to a net loss of approximately S$0.7 million due to clinic closures, competition, and business divestitures Key Financial Indicators for Q1 2022 | Indicator | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 2.06 S$ million | 3.95 S$ million | -47.9% | | Gross Profit | 1.3 S$ million | 2.6 S$ million | -49.5% | | Net (Loss)/Profit After Tax | (0.7) S$ million | 228 S$ | Turned from Profit to Loss | | Dividends | Nil | Nil | No Change | - Key reasons for the decline in net profit include the closure of four general medical clinics due to doctor shortages, intense price competition from online platforms and offline clinics, and revenue loss from the divestiture of S Aesthetic Clinic Pte Ltd and DTAP Express Pte Ltd[7] - Management is optimistic about future revenue growth, primarily due to the Singapore government's relaxation of COVID-19 social management measures[7] Unaudited Condensed Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income For Q1 2022, the company reported a total comprehensive loss of approximately S$0.659 million, a reversal from the prior year's profit of S$228, driven by losses from both continuing and discontinued operations Consolidated Statement of Profit or Loss Summary | Item | Three Months Ended March 31, 2022 (S$) | Three Months Ended March 31, 2021 (S$) | | :--- | :--- | :--- | | Revenue | 2,055,932 | 3,949,082 | | Period (Loss)/Profit from Continuing Operations | (529,479) | 228 | | Period Loss from Discontinued Operations | (129,924) | — | | Period (Loss)/Profit Attributable to Owners of the Company | (659,403) | 228 | | Basic and Diluted (Loss)/Earnings Per Share | (0.00) | 0.00 | Consolidated Statement of Changes in Equity As of March 31, 2022, total equity attributable to owners decreased from approximately S$15.593 million at the beginning of the year to S$14.934 million, primarily due to a comprehensive loss of approximately S$0.659 million recorded during the period Summary of Changes in Equity | Item | Amount (S$) | | :--- | :--- | | Balance as at January 1, 2022 (Audited) | 15,593,032 | | Loss for the Financial Period | (659,403) | | Balance as at March 31, 2022 (Unaudited) | 14,933,629 | Notes to the Financial Statements The notes provide detailed information on financial statement preparation, accounting policies, and key items, including revenue segmentation by service type, with treatment services as the primary source experiencing a significant year-on-year decline, and the February 2022 divestiture of two subsidiaries as discontinued operations Revenue Analysis The Group's revenue is entirely from medical services, with treatment services as the primary source (over 60%), but all service categories saw significant declines in Q1 2022, with treatment service revenue falling over 50% year-on-year Revenue Composition | Medical Service Type | Q1 2022 (S$) | Q1 2021 (S$) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Treatment Services | 1,302,561 | 2,823,280 | -53.9% | | Medical Examination Services | 534,858 | 811,025 | -34.0% | | Consultation Services | 218,513 | 314,777 | -30.6% | | Total | 2,055,932 | 3,949,082 | -47.9% | Discontinued Operations In February 2022, the company divested its entire equity interest in two wholly-owned subsidiaries, S Aesthetics Clinic Pte Ltd and DTAP Express Pte Ltd, for a total cash consideration of S$63,000, with these entities primarily engaged in clinic services - On February 11, 2022, the company entered into an agreement to dispose of 100% equity interest in S Aesthetics Clinic Pte Ltd (SAC) and DTAP Express Pte Ltd (DTAP Express)[24] - The total cash consideration for the disposal was S$63,000[24] (Loss) Per Share Due to the net loss recorded during the period, both basic and diluted loss per share were S$0.00 cents, with the weighted average number of ordinary shares used in the calculation increasing from 520 million to approximately 576 million shares year-on-year (Loss) Per Share Calculation | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | (Loss)/Profit Attributable to Owners of the Company (S$) | (659,403) | 228 | | Weighted Average Number of Ordinary Shares | 576,416,439 | 520,000,000 | | (Loss)/Earnings Per Share (Singapore cents per share) | (0.00) | 0.00 | Management Discussion and Analysis Business Review The Group, operating as 'Dr. Tan & Partners' (DTAP), is a leading general medical network in Singapore; Q1 2022 saw a 47.9% year-on-year revenue decline to S$2.06 million, alongside the divestiture of S Aesthetics Clinic (SAC) and DTAP Express, expected to result in a S$44,000 loss - The Group operates under the 'Dr. Tan & Partners' or 'DTAP' brand in Singapore, offering care services for various conditions including sexual health, men's health, and women's health[31] - The divestiture of subsidiaries SAC and DTAP Express was completed on February 28, 2022, with an anticipated loss of S$44,000[31][32] Q1 2022 Revenue Overview | Item | Amount (S$ million) | Year-on-Year Change | | :--- | :--- | :--- | | Total Revenue | 2.06 | -47.9% | Outlook and Prospects Management is optimistic about future prospects, anticipating robust revenue growth after divesting unprofitable businesses and easing COVID-19 restrictions, with plans to invest in human capital, brand building, and technology, despite operating only six DTAP clinics after closing four due to doctor shortages - Future strategic priorities include investing in human capital to enhance service quality and attract talent, building DTAP brand awareness to expand into new business areas, and investing in technology to adapt to online platform developments[34] - Due to doctor shortages, the company did not renew leases for four clinics located in Orchard, Raffles Place, Siglap, and Somerset, and currently operates six DTAP clinics[34] Financial Review This section details the reasons for changes in financial indicators, including a 47.9% revenue decline due to the pandemic and online competition, a slight decrease in gross profit margin from 66.7% to 64.8% due to increased drug costs, and reduced employee benefits expenses from staff attrition, ultimately leading to a net loss of approximately S$0.659 million - Revenue decreased from S$3.95 million to S$2.06 million, primarily due to the ongoing COVID-19 pandemic and increased competition from online consultation platforms[35] - Gross profit decreased from S$2.6 million to S$1.3 million, with the gross profit margin declining from 66.7% to 64.8%, mainly due to increased costs for drugs and examination services[37] - The period's loss of approximately S$659,403 (compared to a profit of S$228 in the prior year) was primarily attributable to revenue decline from four clinic closures, intense market competition, and revenue loss from the divestiture of two businesses[43] Liquidity, Financial Resources, and Capital Structure The Group maintains a sound financial position, operating primarily on internal cash flow with no bank borrowings; as of March 31, 2022, cash and cash equivalents were approximately S$13.1 million, and the gearing ratio slightly increased from 9.9% to 10.8%, with the capital structure entirely composed of shareholders' equity Liquidity and Capital Structure Indicators | Indicator | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 13.1 S$ million | 13.3 S$ million | | Bank Borrowings | Nil | Nil | | Gearing Ratio | 10.8% | 9.9% | - The Group's capital structure, comprising only share capital, retained earnings, share premium, and other reserves, remained unchanged[49] Significant Investments, Acquisitions, and Disposals During the reporting period, the Group completed a significant disposal, selling its entire equity interest in S Aesthetics Clinic Pte Ltd and DTAP Express Pte Ltd for a total consideration of approximately S$63,000, aiming to divest underperforming businesses and reallocate resources to other existing operations, which constituted a discloseable transaction for the company - The disposal of S Aesthetics Clinic Pte Ltd and DTAP Express Pte Ltd was completed on February 28, 2022, for a total consideration of approximately S$63,000[52] - The rationale for the disposal was to relieve the Group from subsidizing the underperformance of these two businesses and to reallocate resources for the development of other existing operations[55] Net Assets of Divested Subsidiaries as at Disposal Date | Company | Net Assets (S$) | | :--- | :--- | | S Aesthetics Clinic Pte Ltd | 101,096 | | DTAP Express Pte Ltd | 5,642 | Risk Management The Group employs a prudent treasury policy to manage cash and maintain healthy liquidity, with primary operations in Singapore transacting in Singapore Dollars, but faces foreign exchange risk due to some share offer proceeds being denominated in Hong Kong Dollars - Management adheres to a prudent policy for managing cash balances to maintain robust liquidity[57] - The Group primarily transacts in Singapore Dollars but is exposed to foreign exchange risk due to holding proceeds denominated in Hong Kong Dollars[58] Subsequent Events On March 7, 2022, the company's wholly-owned subsidiary entered into a Memorandum of Understanding with Orchard Surgery Centre Private Limited to potentially acquire at least 51% of its equity, though this possible acquisition is subject to further negotiation and may not proceed - On March 7, 2022, the company signed a Memorandum of Understanding to potentially acquire at least 51% of Orchard Surgery Centre Private Limited's equity[61] - This potential acquisition is not yet finalized and remains subject to uncertainty[61] Corporate Governance and Other Information Directors' and Major Shareholders' Interests As of March 31, 2022, Dr. Tan Cher Sen, Chairman and Executive Director, held 350 million shares, representing 56.09% of issued shares, through his wholly-owned Cher Sen Holdings Limited, making him the controlling shareholder Directors' and Major Shareholders' Shareholdings | Shareholder Name | Capacity | Number of Shares Held (Long Position) | Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Dr. Tan Cher Sen | Interest of Controlled Corporation | 350,000,000 | 56.09% | | Cher Sen Holdings Limited | Beneficial Owner | 350,000,000 | 56.09% | Other Disclosures The company complied with the Corporate Governance Code and adopted a code of conduct for directors' securities transactions during the reporting period, with no share options granted under its scheme, no competing business interests from directors or controlling shareholders, no share repurchases, and the Audit Committee reviewed the quarterly financial report - The company has adopted and complied with the Corporate Governance Code and the required standards for directors' securities transactions under the GEM Listing Rules[69][70] - No share options have been granted by the company since the adoption of the share option scheme[71] - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[81] - The Audit Committee has reviewed these unaudited quarterly financial statements and report[82]