Maternity and fertility drive NMC Health's rising profit margin

Abu Dhabi’s NMC Health reported a 72.6 per cent jump in net profit during the first half of the year on the back of an increased number of patients and revenues from higher complexity services such as maternity, long-term care and fertility services.

The London-listed company’s net profit climbed to US$70.5 million, while revenue rose by 46.9 per cent year-on-year to $578.3m, it said on Wednesday.

Expensive maternity and fertility services are driving NMC’s top line compared to its large multispeciality hospitals. Revenue per patient at the maternity and fertility centres was $636.2 during the first half, while it was $131 at its multispeciality hospitals.

“We expect strong performance to continue going forward supported by the increased utilisation of our organic 485-bed capacity expansion over the past 18 months, [and] recent acquisitions,” said B R Shetty, NMC Health’s chief executive, in a statement to London Stock Exchange.

Shares of NMC were trading at £12.90 in the morning, up by 0.16 per cent. They were trading at £6.95 a year ago.

The company, which is also listed on Nasdaq Dubai, has taken steps to limit the impact of recent Abu Dhabi healthcare reforms, NMC told the LSE but no details were given. NMC was not available for comments.

Health Authority – Abu Dhabi changed health insurance policies during the first half with increased co-payments.

NMC, after its acquisition in June of a majority stake in a Danish fertility centre for $13.7m, is looking at regional expansion in Qatar through ProVita long term-care centre. In January, it bought Nadia Medical Center in Abu Dhabi for $15.12m, and wholly acquired Cooper Health Clinic and Cooper Dermatology and Dental Clinic in Dubai for $10.9m in December.

NMC’s healthcare division contributed 66 per cent of the group’s revenue – $389.8m during the period – compared with a 55 per cent contribution, $223.6m, last year.

The net profit of the division was $92.4m, up 92.7 per cent.

Its 21 hospitals, clinics and day care facilities treated 2.11 million patients during the first six months, up from 1.48 million a year earlier. Revenue per patient also increased to $169.7, up by 35 per cent. The average occupancy rate at its facilities decreased to 70.5 per cent during the first half, from 73.9 per cent a year earlier.

In March, NMC opened the $200m NMC Royal Hospital at Khalifa City in Abu Dhabi, which has 75 beds.

Revenue from its distribution division, which handles pharmaceuticals and laboratory equipment among other goods, grew by 10.5 per cent to $205.1m.

NMC had cash and cash equivalents of $46.8m at the end of June, down from $84.02m at the end of last year.

In June, NMC acquired 90 per cent of the Copenhagen Fertility Centre (CFC), in Denmark.

“The group acquired CFC to enable Clinica Eugin to reinforce its presence in Denmark,” it said in the filing. Clinica Eugin is the Barcelona-based fertility centre NMC acquired last year.

Total capital expenditure for the group in the first six months was $40.2m.

NMC’s total debt balance increased to $995m at the end of the first half, up from $730.3m at the end of December.

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