BRIEF: C-MER swings to the red on $26 million in charges

C-MER Medical Holdings Ltd. (3309.HK) said it expects to report its revenue was flat last year compared with 2023, as it swung into the red after taking about HK$200 million ($26 million) in impairment charges due to underperformance of some of its eye care hospitals and clinics.

The company, founded by renowned Hong Kong ophthalmologist Dennis Lam, said it expects to report revenue of about HK$1.9 billion for 2024, similar to the HK$1.92 billion it generated the previous year, according to a stock exchange statement on Wednesday. It said it expects to report a loss for the year of HK$130 million to HK$160 million, reversing a HK$62 million profit a year earlier.

The loss was attributed to between HK$195 million and HK$215 million in impairment charges related to goodwill and the company’s hospitals and clinics. Excluding those charges, the company’s profit for the year ranged between HK$50 million and HK$60 million.

“The impairment loss is due to the weaker-than-expected performance of certain hospitals and clinics as a result of fierce competition and overall weakening of consumer sentiment in 2024,” the company said. “The aforementioned impairments are one-off non-cash expenses and will not have any impact on the overall operation of the group.

C-MER also said that its strong cash flow will allow it to resume paying dividends this year. The company’s stock closed up 2.1% in Thursday trade in Hong Kong.

By Doug Young

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