KUALA LUMPUR (Aug 21): Apex Healthcare Bhd’s (KL:AHEALTH) reported a 92.82% decline in net profit for the second quarter, primarily due to lower share of earnings from its 40% associate Straits Apex Group Sdn Bhd (SAG). 

The group’s net profit was RM23.64 million for the three months ended June 30, 2024 (2QFY2024), compared with RM329.48 million for the same period a year earlier. 

Earnings declined sharply despite revenue rising 11.02% to RM238.74 million from RM215.03 million, amid robust sales of pharmaceuticals, consumer healthcare products and medical devices to both private- and public-sector customers. 

The group declared an interim single-tier dividend of three sen per share for 2QFY2024, up slightly from the 2.5 sen per share distributed in 2QFY2023. The latest dividend will be paid on Sept 18.

The filing with the stock exchange showed a 99.68% drop in earnings contributions from SAG, falling to RM1 million from RM310.9 million a year ago. 

This sharp decline was attributed to the absence of a non-recurring gain of RM304.4 million from SAG’s sale of a 60% stake in Straits Apex Sdn Bhd (SA) to Quadria Capital.

“Earnings in the current quarter were also lower because of the group's reduced effective equity of 16% in SA, as well as the recognition of the group’s share of financing costs and amortisation of intangible assets,” the group explained. 

Looking ahead, demand for healthcare products and services in key markets is expected to remain resilient in the second half of the year, Apex Healthcare added in the filing. 

“The group remains confident that its strong fundamentals, dedicated workforce, cost efficiency initiatives, and increased investment in developing and launching of new group-branded products will support continued growth, and help navigate any unforeseen external challenges. 

“Barring any unforeseen market changes or developments, the group anticipates delivering a satisfactory performance in 2024. The group is confident that its strategic initiatives, coupled with ongoing efforts to optimise operations, will enable it to navigate potential challenges and capitalise on new growth opportunities,” it added. 

For the first half ended June 30, 2024 (1HFY2024), net profit dropped 87.32% to RM44.85 million from RM353.77 million, although revenue was up by 5.66% to RM486.91 million from RM460.83 million for 1HFY2023. 

Shares in Apex Healthcare were unchanged at RM2.72 at Wednesday’s closing, valuing the group at RM1.96 billion.