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Interim Results

NMC Health revenues rise

23 August 2017 07:20

NMC Health said reported revenues increased by 34% year-on-year to $775.2m in the first half of 2017 compared to $578.3m over the same period last year.


- EBITDA reached $170.7m (+47.3% YoY), resulting in a Group EBITDA margin of 22% (+200bps YoY); Healthcare business verticals contributed 86.9% of Group EBITDA in the period, up from 84.7% in H1, 2016

- Adjusted net profits attributable to shareholders increased to $105.7m (+56% YoY)

- Basic EPS reported at $0.429 (H1, 2016: 0.336); Diluted EPS at $0.426 (H1, 2016: $0.334); Adjusted EPS at $0.514 (H1, 2016: $0.363)

- New Management Structure announced to ensure a solid management foundation for further strategic growth


NMC Health produced strong performance in H1, 2017 with good progress seen across all parts of the group.

Our newly opened facilities continue to ramp-up well and the group's acquired businesses are benefitting from both improved performance and the commencement of planned integration projects.

Our long-term growth strategy, predicated on capacity and then capability focussed growth, continues to accelerate our expansion into more complex medical, and thus higher value added, specialty healthcare segments.

The subsequent establishment of new strategic multi-brand verticals is enabling us to unlock synergies within the enlarged group, delivering significantly improved growth for the group despite the continuing more moderate macro environment in our primary market of the UAE.

Over the past 12 months, NMC has focussed on continuing its strategic growth through geographic diversification, organic expansion and the commencement of projects to both release synergies from acquisitions as well as create revenue enhancements from operating initiatives between our various Group businesses.

Our increasingly diversified and enhanced group healthcare asset and brand portfolio is providing the group with increased competitive advantages across our five specialised strategic verticals in what is an increasingly competitive market and, together with a more optimised asset utilisation, is leading to a higher growth, margin and return profile.

Al Zahra Hospital in Sharjah performed well and in line with our expectations during the first five months of the Group's ownership. Initial integration projects have been completed smoothly. Our other acquired facilities in Sharjah, Dr Sunny clinics, also performed well and the Group believes it is now well placed to benefit from the anticipated future roll-out of mandatory insurance in the Sharjah market.

In neighbouring Dubai, our assets continue to benefit from market growth resulting from the introduction of mandatory health insurance.

In Abu Dhabi, the ramp-up of our largest facility, NMC Royal Hospital in Khalifa City, continues to exceed expectations and the removal of Thiqa co-payment requirements by the Health Authority of Abu Dhabi in April 2017 is expected to positively impact in particular this facility, Al Zahra Hospital and Fakih IVF in H2, 2017 and beyond.

The Group's initial move into new geographies in the GCC is proceeding well with good performance experienced in our new assets in both Oman and Saudi Arabia, both of which are trading in-line with management expectations.

During H1, 2017, total patient visits to Group assets were 2.88m, an increase of 36.2% YoY.

Revenue per patient in multi-specialty increased by 15.3% to reach $134.4 and overall revenue per patient increased 8.2% YoY to $183.5.

This growth resulted from continuing focus on higher value procedures and specialties, increasing volumes and contribution in NMC Royal Hospital as well as good revenue per patient contributions from our newly acquired facilities.

In our operations and management vertical, our contract to manage the Sheikh Khalifa General Hospital in Umm al Quwain was extended for a further 5 year term. Additionally, we have signed a number of new contracts and the group will now be managing multiple private and public sector healthcare facilities across varied geographies.

Our Distribution division has continued its good growth trend of recent years with revenue growth of 14.7% YoY, driven principally through the acquisition of new brands and products across its portfolio during the period.

Whilst we believe that the Distribution business is well placed to return continued solid performance, consolidated Group margins continue to benefit from the strategic aim of relative dilution of the Distribution vertical with Healthcare division businesses contributing 70.5% of group revenues compared to 65.5% in H1, 2016 and 48% at the time of IPO in 2012.

As a result, group EBITDA reached $170.7m (+47.3% YoY) with a Group EBITDA margin of 22% (+200bps YoY) and we expect full-year EBITDA to be towards the top end of the current guidance range of $335m to $350m.

The healthcare division margins increased by 60bps YoY to reach 30.2% during the period. Meanwhile, margins of the distribution division improved to 10.8%.


The overall macro-economic outlook in the principal countries in which we operate remains stable.

The ongoing insurance reform in Dubai continues to increase medical insurance penetration rates and expand the UAE healthcare market size.

The increased focus of healthcare privatisation initiatives in our new markets of Saudi Arabia and Oman are also encouraging.

The management team will continue to assess potentially attractive and accretive opportunities for further business expansion and diversification.

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