30th Mar 2015 13:30
LONDON (Alliance News) - Abu Dhabi-based healthcare provider Al Noor Hospitals Group PLC on Monday said its pretax profit and revenue both rose in 2014 as the group further expanded its operations, but shares in the company fell amid concern about the impact its expansion is having on margins.
Al Noor said its pretax profit rose to USD83.9 million from USD61.5 million in 2013, with revenue increasing 23% to USD449.1 million from USD365 million.The FTSE 250-listed company said outpatient volumes rose to around 2 million in 2014, up from 1.7 million a year earlier, while inpatient volumes increased to 42,033 from 40,475.
Average revenue per outpatient rose to USD170 from USD158, while average revenue per inpatient increased to USD2,415 from USD2,237. Total outpatient revenue was up to USD347.5 million from USD274.5 million, while inpatient revenue rose to USD101.5 million from USD90.6 million.
But the group said its underlying earnings before interest, taxation, depreciation and amortisation margin declined to 21.9% from 22.7% due to a combination of wage inflation for its medical staff and a significant investment made in its facilities. Medical staff costs rose 29% in the year, while medicines and consumables revenue rose 10%. The group saw the number of revenue-generating doctors on its books rise to 534, up 14% year-on-year.
The group also said revenue at its Khalifa Street site fell 1% year-on-year due to lower outpatient and inpatient volume, though this was offset comfortably by increased revenue from its Airport Road hospital and from strong performances at Al Ain and its Madinat Zayed, Al Madar and Al Yahar clinics.
It opened three medical centres in Abu Dhabi in 2014, with four more openings planned for 2015, one of which is now operational. It also acquired the Gulf International Cancer Centre, the only private cancer treatment centre in Abu Dhabi, and said the construction of a new 40-bed hospital in Al Ain was on schedule to be opened in 2016. It is also expanding capacity at the Airport Road Hospital.
The group said it will increase its final dividend to 9 pence per share for the year, making its total dividend payout 12.7 pence per share, up 32% year-on-year.
"Al Noor's financial performance continues to be strong and we achieved good growth during 2014. This growth was driven predominantly by our increased outpatient capacity, the expansion of our network of medical centres and the impact of medical centre acquisitions," said Ronald Lavater, Al Noor's chief executive.
Numis downgraded its rating on Al Noor following the results to Hold from Add, saying the consensus estimates for its margins remains too high. Charles Weston, an analyst at the broker, said it expects margins for the company to deteriorate in 2015 and added shares in the company performed well in the lead up to the results, hence the downgrade.
It has a 1,092 pence price target on the stock.
Shares in Al Noor were down 5.4% to 1,020.00 pence on Monday, the worst performer in the FTSE 250.
By Sam Unsted; [email protected]; @SamUAtAlliance
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