Al Noor Hospitals revenue grows 24% as more doctors come on board

“Strong physician hiring and healthy outpatient volume growth were among the drivers for growth in the first quarter,” said the chief strategy officer.

Abu Dhabi’s Al Noor Hospitals Group reported a 24.7 per cent increase in revenue in the first quarter as it added more doctors.

Revenue reached US$111.6 million from $89.5m a year earlier and 32 doctors came on board, taking the total number of revenue-generating physicians to 502. That includes four physicians from its acquisition of Gulf International Cancer Center, Abu Dhabi’s first private oncology treatment facility, for $21.8m in February.

The London-listed hospitals group wants to hire up to 80 revenue-generating physicians this year. Such physicians are those to whom patients would go directly as their primary contact.

“Strong physician hiring and healthy outpatient volume growth were among the drivers for growth in the first quarter,” said Sami Alom, the chief strategy officer at Al Noor.

The group expects wage inflation to remain steady at about 8 per cent for doctors, similar to the previous two years.

“The problem is we have a shortage of doctors and the doctors already licensed in Abu Dhabi are able to command that increase because the market is hungry for doctors,” said Mr Alom. “And there are hospitals and clinics starting up, the doctors have more options and the pay is going up because these [new facilities] want to attract doctors and they have to do so with generous compensation packages.”

Increasing salaries have a significant impact on hospital expenses as they are the most rapidly increasing component. As a hospital experiences inflation, it transfers that to treatment prices.

“Insurance companies have to increase their premiums accordingly to protect their margins, and employers who are at the end of the chain are the ones who are going to feel it,” Mr Alom said.

“It’s possible indirectly the individual feels it as well because if the health insurance premiums are going up rapidly, the employer is not going to feel generous on the basic salary inflation.”

The company expects more recruitment in high demand areas such as gynaecology, cardiology, paediatrics, internal medicine, neonatology and cancer treatment. Currently it has three hospitals across Abu Dhabi city and Al Ain besides 15 clinics. That includes two additions in the first quarter in neighbourhoods such as Al Bateen in the city and Baniyas on the outskirts with “significant Emirati populations”, and at the Industrial City of Abu Dhabi, according to the company filing.

It wants to add one more clinic in the emirate by the year end, Mr Alom said.

Al Noor’s shares were trading at 1,002 pence, up by 1.47 per cent around midday yesterday.

The Deutsche Bank analyst Marc Hammoud has a “hold” rating on the shares. The first quarter revenue is in line with expectations for the full year, he said.

Follow us on Twitter @Ind_Insights