C-MER Medical (3309) H2 2024 earnings summary

Executive summary

• Core medical service revenue rose 0.5% to HK$1,913.2M, offset by cessation of COVID-19 consumables sales, leading to total revenue of HK$1,913.2M, down 0.6% year-over-year.

• Non-cash impairment charges of HK$197.7M led to a net loss of HK$108.3M (2023: profit of HK$86.3M); adjusted profit rose 11.9% to HK$89.4M.

• Strong growth in Mainland China dental business (revenue up 20.8% to HK$464.6M); Mainland China ophthalmic business revenue fell 6.9%.

• Final dividend of HK2.0 cents per share proposed, representing 42.4% of adjusted profit attributable to equity holders.

Financial highlights

• Gross profit decreased 14.8% to HK$527.6M; adjusted gross profit down 2.3% to HK$596.9M.

• Gross profit margin fell to 27.6% (2023: 32.2%); adjusted gross profit margin at 31.2%.

• EBITDA dropped 57.4% to HK$146.5M; adjusted EBITDA up 2.5% to HK$344.2M.

• Net cash from operating activities was HK$283.1M (2023: HK$361.2M); cash and cash equivalents at year-end HK$423.1M.

• Basic and diluted EPS were both HK$(10.96) cents (2023: HK$4.94 cents).

Outlook and guidance

• Demand for ophthalmic services in Hong Kong remains solid; Mainland China ophthalmic business faces challenges from changing consumer patterns.

• Cross-border medical and dental demand from Hong Kong citizens in Shenzhen expected to drive growth.

• Strategic focus on core segments, operational efficiency, and innovation investments.