NMC Health makes solid first half progress, signs new O&M deal
United Arab Emirates-focussed integrated healthcare provider NMC Health reported revenues of $775.2m in its half-year results on Wednesday, an improvement of 34% over the prior year.
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The FTSE 250 company said its EBITDA reached $170.7m in the six months to 30 June, up 47.3% year-on-year, which resulted in a group EBITDA margin of 22%.
It said its healthcare business verticals contributed 86.9% of group EBITDA in the period, up from 84.7% in the first half of 2016.
Adjusted net profits attributable to shareholders increased 56% to $105.7m, while basic earnings per share were 42.9 cents compared to 33.6 cents.
The company said diluted earnings per share increased to 42.6 cents from 33.4 cents, and adjusted earnings per share were 51.4 cents, rising from 36.3 cents a year ago.
NMC also confirmed it was moving to a new management structure to ensure a “solid management foundation” for future strategic growth.
“[The first half of] 2017 has seen strong performance from our acquired businesses, newly opened facilities as well as continuing growth in our more mature facilities,” said chief executive Prasanth Manghat.
“Our acquisitions in Sharjah are performing well and we are very pleased with initial performance from our new Saudi Arabian and Oman operations, as we start to diversify operations from our primary UAE market into the GCC and beyond.”
Manghat said NMC's focus in recent years had been to deliver a capacity and capability growth strategy which enabled it to achieve improved margins and diversify revenue channels, setting a “solid platform” for long term sustained growth.
“We have also started phased integration initiatives aimed at extracting synergies from group operations, maximising asset utilisation and achieving revenue enhancements between complementary group businesses.
“We are very pleased with the progress of these initiatives which, together with our ongoing strategic plan to further grow and diversify operations both organically and through acquisition, gives us confidence for the future.”
The company’s new management structure had been developed following NMC’s “significant growth” over the last two years, Manghat explained, and was designed to ensure a “solid management foundation” for the company’s future strategic growth.
“I wish all my management colleagues very best wishes in their new roles.
“I would like to thank Suresh Krishnamoorthy for his significant contribution to the group over the last 17 years and we look forward to his return to the group in his new role.
“We also send our best wishes Roy Cherry for a quick and full recovery following his recent illness.”
Manghat added that such sustained periods of “significant change and growth” could be difficult for the firm’s employees.
“Our continuing performance improvement during this period has been achieved through the efforts and dedication of all of our management and staff and I would personally like to thank all of them for their continuing hard work and commitment in maintaining our high-quality service and patient care.”
NMC Health signs new O&M contract for three Emirates brands
NMC Health also said on Wednesday that it has signed a new operations and maintenance contract for the management of Emirates Healthcare assets, comprising three brands.
The FTSE 250 company said the brands comprised Emirates Hospitals and Clinics, which provides general medical services across six Emirates in the UAE; CosmeSurge, which provided cosmetic medical services in the UAE with a single clinic in the UK; and Emirates Rehab and Homecare Services, which provides home nursing, rehabilitation, therapeutic care and home-based care, and is present in the UAE, Slovakia and Oman.
NMC said on Wednesday that it also recently extended the management contract for the 205-bed Sheikh Khalifa General Hospital in Umm Al Quwain, managed on behalf of the UAE Ministry of Presidential Affairs, for a further five years.
The original contract was the first ever awarded by a government department to a local UAE business to manage a large government healthcare facility, the board claimed, demonstrating confidence in NMC's significant healthcare experience and capabilities.
“NMC is now managing multiple private and public sector healthcare facilities across varied geographies,” the firm’s board said in its statement.
“Total annual revenues from the O&M vertical are set to reach $19m.
“These contracts continue to be associated with good returns and require minimal capital expenditure or working capital on part of the group.”