Al Noor Hospitals set for further expansion as profit rises

Al Noor Hospitals posted increased profits last year on the back of more patients and new medical centres as the company eyes up further expansion this year.

London-listed Al Noor on Monday reported an 18.3 per cent increase in underlying net profits to US$84.6 million as revenues rose 23 per cent to $449.1m. Its earnings before interest, taxes, depreciation, and amortization for the second half of the year was $46m, up from around $40m during the same period in 2013, according to calculations by The National.

The company catered to 1,992,813 outpatients, up by 19.2 per cent from 2013, and 42,033 inpatients, up by 4 per cent.

Al Noor expects to deploy at least $60m this year for an expansion of its existing facilities and procuring new equipment. It used $64m last year for similar activities including buying the Gulf International Cancer Centre for $31m. It opened three medical centres last year.

“The company’s recruitment strategy to increase its doctors’ workforce, [and] improving utilisation of existing facilities” were also among the growth drivers, according to Shuaa Capital analysts.

The average revenue per inpatient increased by 8 per cent to $2,415 while the figure for outpatients improved at a similar rate to $170.

The hospitals group employed 534 revenue-generating physicians at the end of last year, up by 14 per cent from 2013, and expects to add at least 60 more this year recruited from the local market as well as Europe and the UK. Revenue-generating physicians are those to whom patients are referred to directly.

Medical staff costs rose by 29 per cent to $152.5m last year. The inflation rate for physician salaries is expected to remain at 6 per cent this year, and at 8 to 9 per cent for nurses.

“There is a shortage of doctors and nurses globally and to compete to have new doctors and nurses we have seen market pressures and wage inflation for the medical staff,” said Ronald Lavater, the chief executive of Al Noor Hospitals group.

A new 40-bed hospital in Al Ain is expected to open in the first half of next year. Al Noor will also open three medical centres in the second half of the year in Sharjah, Khalifa City A in Abu Dhabi and in Al Ain. In the first quarter, it opened a medical centre in the Western Region at the Emirates Nuclear Energy Corporation campus. The expansion of its Airport Road hospital in the capital is expected to continue over the next three to four years and will eventually double the number of beds from the current 130.

Al Noor Hospitals shares were trading at 1,055 pence on Monday morning, down by 2.13 per cent from last week’s close. The shares touched a high of 1,165 pence a year ago.

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