NMC Healthcare, the biggest healthcare provider in the UAE by market value, reported a 38 per cent year-on-year rise in 2017 net profit, as revenues increased and the company continues to acquire new assets and expand its geographic footprint.
Net income rose to $209.2 million, while the group’s revenues climbed 31.3 per cent to $1.6 billion for the year, the company said in a statement on Wednesday. Organic growth accounted for about 16 per cent year-on-year increase in total revenues, while its healthcare division recorded a 41 per cent surge in revenue to $1,16bn over the same period.
Total patients treated across NMC’s healthcare centres, rose by 33.5 per cent to 5.8 million. Revenue per patient increased 7.6 per cent at the facilities which, the company said, operated at 71.6 per cent occupancy last year.
“Consolidation of previous organic and inorganic expansions, extension of our geographic footprint and strengthening and deepening of the management structure all marked a very active year for NMC,” said Prasanth Manghat, NMC Health's chief executive officer. “In short, we see 2017 as setting the stage for many more years of growth for the company and we begin 2018 with confidence.”
The company, whose shares are traded in London, further consolidated its position in the domestic healthcare market last year and expanded operations to in Saudi Arabia, the most populous GCC country and largest economy in the Arab world. NMC also expanded into Oman, where it currently accounts for 20 per cent of the private sector bed capacity, the company said.
The healthcare provider, which was on an acquisition spree in 2017, has continued purchasing new assets this year. It acquired controlling stakes in two GCC-based healthcare operators for a combined investment of $207m. The deals, announced in February, gave the company a 70 per cent stake in CosmeSurge, a UAE-based cosmetic surgery and aesthetic medicine healthcare company and a 80 per cent stake in Al Salam Medical Group, a Riyadh-based healthcare operator.
Investment houses and healthcare operators in the GCC are increasingly looking to expand their portfolio of investments as the region's population grows and demand for healthcare services increases. In December NMC said it was looking to invest $800m in the region and beyond from 2018 as it banks on growth from the privatisation of the healthcare sector in Saudi Arabia and the roll-out of mandatory health insurance in Dubai and Oman.
The company's $800m "war chest" includes $500m from cash and funded facilities and $300m from the company’s balance sheet. NMC may also consider issuing a bond to help fund any acquisitions, it said at the time.
On Wednesday Mr Manghat said the company continues to benefit from ready access to debt financing and a supportive shareholder base.
“While we continue to apply strict criteria to our expansion opportunities this backdrop gives us confidence in addressing any future funding requirements to support our ambitious growth plans,” he noted.
“[The] Sustained ramp up of utilisation at facilities we opened in recent years, integration of acquired assets and continued discipline in organic and inorganic expansions should all translate into a very promising 2018 and beyond,” he said of NMC’s 2018 business outlook.