Al Noor shares fall after revenue gains fail to impress and CFO resigns

Al Noor Hospitals Group shares fell yesterday despite posting a 12 per cent rise in first-quarter revenue.

The Abu Dhabi-based, London-listed company recorded revenue of US$124.9 million compared with $111.6m a year earlier.

The resignation of the company’s chief financial officer, Pramod Balakrishnan, weighed on the stock, which dropped by about 4 per cent in early London trade.

“The growth rate is lower than consensus and our forecasts for the full year, [which is] a 15 per cent increase,” said Charles Weston, an analyst at the London-based Numis Securities. “We view the revenue growth and change of [chief financial officer] as unlikely to support a bull case.”

The company said it was debt-free, with $93.7m in cash and bank deposits at the end of March, up from $63m in the same period last year. It has an unutilised $81.7m working capital and acquisition credit line, unchanged from last year, for future use.

“We continue to pursue our expansion plans into new markets and development of clinical services to achieve a robust ‘continuum of care’ for our patients,” said Ronald Lavater, the chief executive.

The group said it had increased its inpatient volumes, with the hospitals on Abu Dhabi’s Airport Road and Al Ain driving the growth, offsetting a fall at the Khalifa Street centre in the city. The facility faces increasing competition and is undergoing refurbishments after being in operation for 16 years. The hospital is located close to several hospitals such as NMC Specialty Hospital and Al Raha Hospital.

More hospitals are expected to be built in Abu Dhabi this year, with Cleveland Clinic on Al Maryah Island opening more critical care units by the end of the month.

In the first quarter, Al Noor opened a medical centre in the Western Region at the Emirates Nuclear Energy Corporation power plant site.

It used $64m last year to buy assets, including the Gulf International Cancer Centre in Abu Dhabi for $26.7m. It also opened three medical centres last year.

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