25th Aug 2015 10:00
LONDON (Alliance News) - Al Noor Hospitals Group PLC on Tuesday said it expects "slightly higher growth in revenue and earnings" in the second half of 2015 compared to the first, and reported an 8.5% rise in revenue for its first half, although higher operating costs resulted in a lower pretax profit.
The Abu Dhabi private healthcare service provider proposed an interim dividend of 4.1 pence, up 10.8% from 3.7 pence a year before.
Al Noor posted a pretax profit of USD44.9 million for the half year to end-June, down from USD45.6 million a year before, as a 8.5% rise in revenue to USD244.0 million from USD224.8 million was offset by an increase in operating costs related to higher depreciation expenses and the acquisition of the Gulf International Cancer Centre.
Underlying earnings before interest, tax, depreciation and amortisation - stripping out some exceptional transaction-related costs - rose 4.3% to USD53.9 million from USD51.7 million in the half year.
Revenue growth was driven by higher outpatient volumes, the company said, boosted by its new medical centres and growth in patient volumes from its acquired facilities. This offset a decline at its Khalifa Street Hospital, where it has been undertaking a refurbishment programme, and a hit from new competition entering the market. Al Noor is expanding its operations at its Al Ain Hospital, Khalifa Street and Airport Road Hospital, as well as continuing to invest in new staff, systems, processes and infrastructure.
The company said that it had delivered volume growth across all insurance payer categories, and average revenue per inpatient increased by 0.4%, although average outpatient revenue fell by 3%, hit by a change in payer mix.
The fall in volume at Khalifa, combined with a one-off adjustments to consumables and medicine stocks, also led to a reduction in the company's underlying earnings before interest, tax, depreciation and amortisation margin.
The company said that trading in its second half has started in line with its expectations, and its outlook remains "broadly unchanged". It expects to deliver "higher growth in revenue and earnings in the second half" as it increases the number of its in-patient beds at its Al Ain Hospital, and sees the benefits of its recent investments in infrastructure and equipment at its hospitals.
Al Noor has also recently implemented a number of initiatives to improve margin, which it expects to offset losses from start-up medical centres and the slight decrease in average outpatient revenue.
Al Noor said it continues to expect its margins in the second half to be hit by the opening of new medical centres and continued work at Khalifa, but expects these factors to diminish during 2016.
"Overall, Al Noor medical centres and hospitals performed well with good revenue growth over the first six months of the year. We continued to make investments in our infrastructure, strengthen our systems and processes and enhance our clinical staff to support sustainable growth," said Chief Executive Officer Ronald Lavater in a statement.
The company appointed Joanne Curin in late July as its interim chief financial officer, and said the search for a permanent CFO is "well underway", with a further announcement to be made in due course.
Shares in Al Noor were up 1.1% at 845.00 pence Tuesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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