Cost efficiencies drive NMC Health to record profit in 2018

NMC Health, a London-listed UAE healthcare operator, posted a record profit for 2018 as revenues climbed on the back of cost efficiencies and the successful integration of acquired assets.

Net income for the 12-month period ending December jumped 20.4 per cent yearon-year to $251.9 million (Dh924.8m), the company said in a bourse filing to the London Stock Exchange. Total revenues advanced 28.3 per cent to $2.06bn for the period, driven by its healthcare division, for which revenue surged 34.4 per cent, NMC said.

Prasanth Manghat, chief executive of NMC, said: “Strong operational performance of our existing assets, combined with smooth integration of previous and new acquisitions, continue to translate into stellar financial performance.

“Both 2018 revenues and Ebitda[earnings before interest, tax depreciation and amortisation] came in ahead of our guidance at $2.1bn and $487.4m, respectively.”

“Moreover, a strong start to the current year reinforces our confidence in the business, and we remain confident that 2019 will prove to be another year of record top and bottom lines,” he said.

From an operational standpoint, the company, which operates across the Arabian Gulf, completed several high-profile initiatives last year, including a preliminary agreement to expand in Saudi Arabia.

Last week, NMC announced that it has finalised a joint venture agreement with Saudi Arabia’s General Organisation for Social Insurance that includes up to 6bn riyals of investments in the kingdom over a five-year period.

The preliminary agreement was signed in October last year with Hassana Investment Company, the investment arm of Gosi, to set up a venture that will acquire and develop facilities with a capacity of up to 3,000 beds and employ up to 10,000 full-time and part-time employees, the company said.

“This partnership will allow NMC to significantly increase its pace of expansion in the kingdom, while simultaneously bringing best practices to the country,” Mr Manghat said. “The attractive, but underserved Saudi healthcare market offers significant growth opportunities and the JV is uniquely placed to benefit from them.”

Saudi Arabia, the biggest healthcare market in the GCC, is encouraging private sector involvement in the sector to help meet rising demand for medical services due to an expanding population, expensive treatment costs and rising insurance coverage, according to a report from Dubai investment bank Alpen Capital.