REG-MD Medical Group Investments Plc MD Medical Group Investments Plc: MD Medical Group announces operating results for Q1 2023
28/04/2023 08:15
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MD Medical Group Investments Plc (MDMG)
MD Medical Group Investments Plc: MD Medical Group announces operating
results for Q1 2023
28-Apr-2023 / 10:00 MSK
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MD MEDICAL GROUP ANNOUNCES OPERATING RESULTS FOR Q1 2023
28 April 2023 – MD Medical Group Investments Plc (“MD Medical Group”,
“MDMG”, “Group” or the “Company”; LSE and MOEX: MDMG), a leading Russian
private healthcare provider, today announces its operating and unaudited
financial results for the first quarter of 2023.
Key financial highlights for Q1 2023:
• Total revenue remained flat year-on-year (y-o-y) at RUB 6,221 million.
• Revenue of the Group’s regional hospitals grew by 14.4% y-o-y to
RUB 1,669 million thanks to the strong operational performance of the
medical cluster in Tyumen, the target utilisation rate achieved at IDK
hospital in Samara, as well as the solid results of MD Group Lakhta
hospital in St Petersburg.
• Revenue from out-patient clinics in other regions rose by 23.0% y-o-y
to RUB 823 million as elective care and IVF recovered following the
pandemic.
• Revenue of the Group’s hospitals in Moscow decreased by 11.0% y-o-y to
RUB 3,084 million due to the strong base effect in Q1 2022 associated
with a high utilisation rate at the Lapino-4 COVID treatment facility
amid the pandemic.
• Revenue from out-patient clinics in Moscow and the Moscow Region rose
by 5.1% y-o-y to RUB 641 million on the back of stronger demand for
IVF following the pandemic.
Key operational highlights for Q1 2023:
• Total out-patient treatments increased by 7.8% y-o-y to 485,959, with
the average ticket up 4.4% to RUB 5.4 thousand in Moscow and down 0.2%
y-o-y to RUB 2.1 thousand in other regions.
• Total in-patient treatments went up by 1.6% y-o-y to 35,395, with the
average ticket down 11.1% to RUB 90.3 thousand in Moscow and up 0.2%
y-o-y to RUB 36.4 thousand in other regions.
• Total IVF cycles increased by 14.9% y-o-y to 4,140, with the average
ticket increasing by 9.7% to RUB 287.1 thousand in Moscow and by 14.0%
y-o-y to RUB 266.1 thousand in other regions.
• Total deliveries increased by 9.9% y-o-y to 2,207, with the average
ticket decreasing by 6.6% y-o-y to RUB 456.2 thousand in Moscow and
rising by 12.1% y-o-y to RUB 192.4 thousand in other regions.
Key events during Q1 2023 and after the reporting period:
• Medical centre opened in the Moscow Region. On 13 January 2023,
MD Medical Group opened a new out-patient medical centre,
Mother & Child Mytishchi, with a capacity of up to 24,000 appointments
per year. Total investments in the project stood at
around RUB 23 million.
• Launching the procedure for changing the GDR programme depositary. On
10 April 2023, MD Medical Group launched the procedure for changing
the depositary bank that administers the Company’s Global Depositary
Receipts (GDR) programme. RCS Issuer Services S.A.R.L. was appointed
as the new depositary bank. This process will take about
120 days 1 1 .
Mark Kurtser, CEO at MDMG, said:
“We made a head start in 2023, demonstrating the Company’s ability to
adjust to the changing market environment and delivering strong operating
performance.
“In Q1 2023, we continued building up capabilities in our traditional
areas. In particular, we ran 15% more IVF cycles y-o-y, with revenue
growing by 29%.
“Despite a certain demographic decline nationwide, our growth in
deliveries amounted to 10% in the first quarter, mainly driven by regional
hospitals. As an example, MD Group Lakhta hospital in St Petersburg has
already achieved a 30% utilisation rate in the first year of its core
operations and is up for further growth. In Q1 2023, the regional growth
of revenue in deliveries was 41%.
“It is also worthy of note that children’s healthcare keeps growing, with
its revenue for the period up by 15%.
“Despite the expected decrease in COVID-19 diagnostic and treatment
services, we see stable demand in non-core multidisciplinary segments,
such as oncology, trauma care, and therapy. In Q1 2023, the Group’s
Revenue growth, excluding the impact of COVID-19, was 11%.
“We keep developing our business and solidifying our positions in the
existing markets. We have already started the construction of a nuclear
medical centre at the Lapino medical cluster and a clinical hospital in
Domodedovo, as well as multidisciplinary clinic in Moscow.
“Capitalising on the solid results of the reporting period, we continue
increasing the utilisation rate at our existing hospitals and building new
assets to support sustainable growth going forward.”
Key Highlights for Q1 2023
1Q 2023 1Q 2022 change,%
Operating indicators 2 2
Moscow hospitals
Out-patient visits 128,560 130,520 (1.5%)
In-patient days 16,209 17,038 (4.9%)
IVF cycles 663 578 14.7%
Deliveries 1,017 1,064 (4.4%)
Hospitals in regions
Out-patient visits 175,154 159,890 9.5%
In-patient days 18,604 17,272 7.7%
IVF cycles 625 569 9.8%
Deliveries 1,190 944 26.1%
Out-patient clinics in Moscow and Moscow region
Out patient visits 51,804 49,017 5.7%
IVF cycles 974 904 7.7%
Out-patient clinics in regions
Out patient visits 130,441 111,547 16.9%
In-patient days 582 515 13.0%
IVF cycles 1,878 1,552 21.0%
Total out-patient visits 485,959 450,974 7.8%
Total in-patient days 35,395 34,825 1.6%
Total IVF cycles 4,140 3,603 14.9%
Total deliveries 2,207 2,008 9.9%
Revenue, RUB mln
Hospitals in Moscow
Out-patient visits 675 636 6.1%
In-patient days 1,464 1,731 (15.4%)
IVF cycles 206 151 36.4%
Deliveries 464 520 (10.8%)
Other revenue 275 429 (35.9%)
Hospitals in regions
Out-patient visits 406 358 13.4%
In-patient days 685 635 7.9%
IVF cycles 179 140 27.9%
Deliveries 229 162 41.4%
Other revenue 170 164 3.7%
Out-patient clinics in Moscow and Moscow region
Out-patient visits 305 298 2.3%
IVF cycles 264 237 11.4%
Other revenue 72 75 (4.0%)
Out-patient clinics in regions
Out-patient visits 251 227 10.6%
In-patient days 14 12 16.7%
IVF cycles 487 355 37.2%
Other revenue 71 75 (5.3%)
Hospitals in Moscow 3,084 3,467 (11.0%)
Hospitals in regions 1,669 1,459 14.4%
Clinics in Moscow and MR 641 610 5.1%
Clinics in regions 823 669 23.0%
Managing company and other 4 3 33.3%
Total Revenue 6,221 6,208 0.2%
1Q 2023 1Q 2022 change,%
Average ticket, RUB ths
Moscow hospitals
Out-patient visits 5.3 4.9 7.8%
In-patient days 90.3 101.6 (11.1%)
IVF cycles 310.7 261.2 18.9%
Deliveries 456.2 488.7 (6.6%)
Hospitals in regions
Out-patient visits 2.3 2.2 3.5%
In-patient days 36.8 36.8 0.2%
IVF cycles 286.4 246.0 16.4%
Deliveries 192.4 171.6 12.1%
Out-patient clinics in Moscow and Moscow region
Out patient visits 5.9 6.1 (3.2%)
IVF cycles 271.0 262.2 3.4%
Out-patient clinics in regions
Out patient visits 1.9 2.0 (5.4%)
In-patient days 24.1 23.3 3.2%
IVF cycles 259.3 228.7 13.4%
LFL performance for Q1 2023, % y-o-y
1Q 2023
Revenue Actual capacity Average ticket
Moscow hospitals
Out-patient visits 6.1% (1.5%) 7.8%
In-patient days (15.4%) (4.9%) (11.1%)
IVF cycles 36.4% 14.7% 18.9%
Deliveries (10.8%) (4.4%) (6.6%)
Other revenue (35.9%) - -
Hospitals in regions
Out-patient visits 11.8% 7.7% 3.8%
In-patient days 4.5% 3.2% 1.2%
IVF cycles 27.9% 9.8% 16.4%
Deliveries 32.7% 18.5% 12.0%
Other revenue (1.0%) - -
Out-patient clinics in Moscow and Moscow region
Out patient visits 0.3% 2.5% (2.1%)
IVF cycles 11.4% 7.7% 3.4%
Other revenue (9.9%) - -
Out-patient clinics in regions
Out patient visits 10.1% 16.4% (5.4%)
In-patient days 14.5% 13.0% 1.4%
IVF cycles 34.3% 17.5% 14.3%
Other revenue (8.1%) - -
Managing company and other 33.3% - -
Total Revenue (1.0%)
Hospitals in Moscow
In Q1 2023, revenue, including other revenue 3 3 , from Moscow hospitals
declined by 11.0% y-o-y to RUB 3,084 million, mainly driven by a decrease
in COVID-19 diagnostic and treatment services amid the pandemic slowdown,
with a y-o-y drop in the number of in-patient days and out-patient visits
by 4.9% and 1.5%, respectively. In addition, revenue was negatively
affected by fewer deliveries in Moscow (down 4.4% y-o-y) due to the
overall downward trend in Russia’s birth rate.
A decrease in revenue from COVID-19 diagnostic and treatment services and
revenue from delivery services was partly offset by a 36.4% y-o-y spike in
revenue from IVF thanks to the post-pandemic demand recovery (+14.7% IVF
cycles y-o-y), as well as stronger demand for treatment unrelated to
women’s and children’s healthcare (the number of in-patient days in
traumatology, oncology, and therapy was up +64.1%, +18.7% and +22.1%
y-o-y, respectively).
Significant growth of the average IVF ticket by 18.9% y-o-y came from an
increase in the number of IVF services provided using new treatment
standards (EmbryoScope), as well as higher reliance on donor materials.
The average ticket for in-patient treatments fell by 11.1% y-o-y, mainly
driven by a drop in the number of COVID-19 intensive care beds amid the
pandemic slowdown.
Hospitals in regions
In Q1 2023, regional hospitals’ revenue grew by 14.4% y-o-y to
RUB 1,669 million, driven mainly by a 26.1% y-o-y surge in deliveries,
with revenue from this business line up 41.4% y-o-y.
A considerable increase in the number of deliveries came on the back of
Tyumen-1 and Samara-based IDK hospital gradually progressing towards
design capacity (with utilisation rates going up 2.4 p.p. y-o-y to 28.0%
and 2.9 p.p. y-o-y to 45.0%, respectively), as well as strong results of
the new MD Group Lakhta hospital in St Petersburg, which achieved a 30.5%
utilisation rate in the reporting period.
The 12.1% y-o-y increase in the average ticket for deliveries in regional
hospitals was mainly driven by indexed prices.
Revenue growth was also significantly fuelled by an increase in the number
of IVF cycles (up 9.8% y-o-y) amid the post-pandemic demand recovery, with
revenue rising by 27.9% y-o-y in this segment. The growth of the average
IVF ticket by 16.4% was supported by an increase in the number of IVF
services provided using new treatment standards (EmbryoScope).
Out-patient clinics in Moscow and Moscow Region
In Q1 2023, revenue from clinics in Moscow and the Moscow Region rose by
5.1% y-o-y to RUB 641 million. Revenue growth in the reporting period was
mainly attributable to a 7.7% y-o-y increase in the number of IVF cycles
amid the post-pandemic demand recovery.
Out-patient clinics in regions
In Q1 2023, revenue from regional out-patient clinics rose by 23.0% y-o-y
to RUB 823 million. Revenue growth was attributable to the recovering
demand, with IVF cycles up 21.0% y-o-y. On a positive note, we opened the
Novosibirsk Centre for Reproductive Medicine renovated in 1H 2022 in
addition to strong results of the clinic with a focus on IVF launched in
Yekaterinburg in November 2022.
The growth of the average IVF ticket by 13.4% y-o-y was supported by an
increase in the number of IVF services provided using new treatment
standards (EmbryoScope).
The reporting period saw a spike in attendance (up 16.9% y-o-y) along with
a 5.4% drop in the average ticket on the back of the growing share of
telemedicine in total visits.
Net cash position
As at 31 March 2023, the Group’s debt represented entirely by lease
liabilities declined from the 31 December 2022 level by RUB 27 million to
RUB 623 million. As a result, as at 31 March 2023, the Company’s net cash
position amounted to RUB 5,539 million.
Capex
Total Capex declined by 72.9% y-o-y to RUB 149 million in Q1 2023. The
hospital segment accounts for the bulk of Capex (69.8%), while the
construction of new clinics and ongoing maintenance make up 30.2% of total
Capex.
In the reporting period, the Group opened the Mother & Child Mytishchi
medical centre with a focus on antenatal care.
The Lapino-3 nuclear medical centre (part of the Lapino medical cluster)
and the Domodedovo multi-functional hospital are in their designing cycle,
both expected to be launched in 2025. Their estimated Capex amounts to
approximately RUB 8.5 billion.
In Q4 2023, multidisciplinary clinic is expected to be launched in ZILART
residential complex in Moscow. Its estimated Capex amounts to
approximately RUB 78 million.
Notes:
1. Data is based on management accounts
2. Minor variations in calculation of totals, subtotals and/or percentage
change are due to rounding of decimals
***
For further information please contact:
Investors
Battalova Renata
Investor Relations Director
Tel.: +7 917 294 28 82
r.battalova@mcclinics.ru
About MD Medical Group
MD Medical Group is a leading provider in the highly attractive Russian
private healthcare service market. Today, the Company manages 53
state-of-the-art healthcare facilities, including 10 multidisciplinary
hospitals and 43 out-patient clinics in 26 regions of the Russian
Federation. In 2022, MD Medical Group’s revenue amounted to RUB 25.2 bln.
The Company’s global depositary receipts are traded on the London Stock
Exchange (LSE: MDMG) and Moscow Exchange (MOEX: MDMG).
Forward-Looking Statements
This press release contains forward-looking statements, which are based on
the Company’s current expectations and assumptions and may involve known
and unknown risks and uncertainties that could cause actual results,
performance or events to differ materially from those expressed or implied
in such statements. The forward-looking statements contained in this press
release are based on past trends or activities and should not be taken
that such trends or activities will continue in the future. It is believed
that the expectations reflected in these statements are reasonable, but
they may be affected by a number of variables which could cause actual
results or trends to differ materially, including, but not limited to:
conditions in the market, market position of the Company, earnings,
financial position, cash flows, return on capital and operating margins,
anticipated investments and economic conditions; the Company’s ability to
obtain capital/additional finance; a reduction in demand by customers; an
increase in competition; an unexpected decline in revenue or
profitability; legislative, fiscal and regulatory developments, including,
but not limited to, changes in environmental and health and safety
regulations; exchange rate fluctuations; retention of senior management;
the maintenance of labour relations; fluctuations in the cost of input
costs; and operating and financial restrictions as a result of financing
arrangements. No statement in this press release is intended to constitute
a profit forecast, nor should any statements be interpreted to mean that
earnings or earnings per share will necessarily be greater or lesser than
those for the relevant preceding financial periods for the Company. Each
forward-looking statement relates only as of the date of the particular
statement.
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4 1 As of the date of the press release published on 5 10 April 2023
6 2 Adjustments in 2022 are associated with a change in the accounting
methodology in 2023 of the Group's operating indicators
7 3 Other revenue includes other medical revenue (incl. laboratory
tests) and other non-medical revenue
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Dissemination of a Regulatory Announcement that contains inside
information in accordance with the Market Abuse Regulation (MAR),
transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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ISIN: US55279C2008
Category Code: QRT
TIDM: MDMG
LEI Code: 213800XKI6VHY4JBS612
Sequence No.: 240182
EQS News ID: 1619767
End of Announcement EQS News Service
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