REG-MD Medical Group Investments Plc MD Medical Group Investments Plc: MD Medical Group posts 37.7% EBITDA, 41.8% Net profit growth in FY 2021
28/03/2022 08:15
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MD Medical Group Investments Plc (MDMG)
MD Medical Group Investments Plc: MD Medical Group posts 37.7% EBITDA,
41.8% Net profit growth in FY 2021
28-March-2022 / 10:00 MSK
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR), transmitted by
EQS Group.
The issuer is solely responsible for the content of this announcement.
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MD MEDICAL GROUP POSTS 37.7% EBITDA, 41.8% net profit GROWTH IN FY 2021
28 March 2022. MD Medical Group Investments Plc ("MD Medical Group,"
"MDMG," the "Group" or the "Company" - LSE and MOEX: MDMG), a leading
Russian private healthcare provider, announces its audited consolidated
financial statements for the 12 months ended 31 December 2021 under
International Financial Reporting Standards ("IFRS").
Key financial highlights for FY 2021:
• Revenue grew 31.8% year-on-year (y-o-y) to RUB 25,220 mln.
• EBITDA grew 37.7% y-o-y to RUB 8,276 mln with EBITDA margin of 32.8%,
up 1.4 p.p. y-o-y.
• Net profit grew 41.8% y-o-y to RUB 6,143 mln. The net profit margin
was 24.4% vs. 22.6% in FY 2020.
• Operational cash flow grew 30.5% y-o-y to RUB 8,499 mln.
• Capex amounted to RUB 3,790 mln, down 2.9% y-o-y. Investments were
mainly focused on the hospital segment, namely the launch of the new
hospitals MD Lakhta in St. Petersburg and Tyumen-2.
• Net debt amounted to RUB 1,924 mln as of 31 December 2021. The net
debt to EBITDA ratio amounted to 0.2x.
Key operational highlights for FY 2021 1 1 :
• Total out-patient treatments grew 15.2% y-o-y to 1,858,633.
• Total in-patient treatments grew 29.9% y-o-y to 152,621.
• Total deliveries grew 8.2% y-o-y to 8,397.
• Total IVF cycles grew 8.3% y-o-y to 16,526.
Key events during 2021 and after the reporting period:
• In June 2021, MDMG registered the company MGIMO Med in partnership
with the Moscow State Institute of International Relations (MGIMO) as
part of an initiative to launch a medical university.
• In October 2021, MDMG opened a second out-patient Oncological Care
Centre in Mozhaysk, Moscow Region, continuing its expansion of
oncological care services in line with the Group's strategy.
• In December 2021, MDMG launched its own network of laboratory test
collection points under the brand MD Lab with the opening of the first
collection point in Moscow. In February 2022, the Group opened its
second collection point.
• In January 2022, MDMG opened the new multi-disciplinary hospital MD
Lakhta in St. Petersburg. Total investments in the project amounted to
approximately RUB 2 bln.
• In February 2022, MDMG launched the new multi-disciplinary hospital
Tyumen-2. Total investments in the project amounted to approximately
RUB 1 bln.
Mark Kurtser, CEO of MD Medical Group, said:
"Our business saw a successful year in 2021: our effective response to the
challenges associated with COVID-19 enabled us to demonstrate excellent
financial results.
"I am particularly pleased to note our excellent performance in areas not
related to healthcare for women and children. This segment accounted for
51% of our total revenue in 2021, up from 45% a year earlier. At the same
time, we continued to grow in those areas that have historically been our
main focus, with revenues from healthcare for women and children
increasing by 16%. We believe that our diversification strategy is being
implemented successfully, and we have been expanding the range of services
we offer step by step - in the future, we intend to launch new services
across areas where we see potential. As for changes in overall demand, we
are seeing the volume of elective treatment returning to pre-pandemic
levels as the pandemic recedes.
"We have also continued to expand. In February, in line with previously
announced plans, we opened our second multi-disciplinary hospital in
Tyumen, with 100 beds. In addition, we continued to develop our new
business segment under the brand MD Lab and have already opened two
laboratory test collection points. At the same time, our recently launched
projects, including Lapino-2, Lapino-4, Tyumen-2 and MD Lakhta, are
meeting expectations and are moving towards target capacity utilisation as
planned.
"This shows that our diversified business model is driving the sustainable
development of our business. This factor, along with low debt of RUB 1,924
million and a strong cash position, is evidence of our stable position
even in the face of challenging external conditions.
"I would like to stress that today, we are continuing to operate as usual.
We are paying particular attention to ensuring an uninterrupted supply of
medicines, and we currently are not experiencing any supply problems in
that regard. At the same time, we are focused on ensuring sufficient
liquidity. To this end, investments in new projects have been put on hold,
including the payment of dividends, until we have more clarity on the
situation. I would also like to note that we are closely monitoring things
as they develop, and we do not rule out the possibility of paying out
dividends before the end of the year.
"To sum up, I would like to say that we are pleased with the previous
year's results as we continue to unlock the huge potential of our
business."
FY 2021 Financial Highlights
RUB mln 12М2021 12М2020 change
Revenue 25,220 19,133 31.8%
Hospitals in Moscow 14,013 9,721 44.2%
Hospitals in regions 5,803 4,602 26.1%
Out-patient clinics in Moscow and MR 2,418 2,246 7.6%
Out-patient clinics in regions 2,972 2,548 16.6%
Managing company and other 15 16 (6.3%)
Gross profit 9,988 7,127 40.1%
Gross profit margin,% 39.6% 37.2% 2.4p.p.
EBITDA 8,276 6,008 37.7%
EBITDA margin,% 32.8% 31.4% 1.4p.p.
EBIT 6,622 4,504 47.0%
EBIT margin,% 26.3% 23.5% 2.8
FX gain / (loss) (8) 123 n/a
Net finance expenses (456) (289) 57.9%
Profit before tax 6,158 4,338 42.0%
Taxes (15) (5) 219.3%
Net income 6,143 4,333 41.8%
Net income margin,% 24.4% 22.6% 1.7p.p.
Revenue
The Group's revenue in FY 2021 grew 31.8% y-o-y and amounted to RUB 25,220
mln. This significant growth was mainly driven by an increase in capacity
utilisation at Moscow-based and regional hospitals (where revenue grew
44.2% and 26.1% y-o-y, respectively) amid a recovery in demand for medical
services, the reaching of target capacity utilisation at Lapino-4, and a
significant increase in patient flow at the Lapino-2 oncological centre.
Revenue from medical services not related to women's and children's health
accounted for 51.2% of total revenue, up from 44.6% in 2020.
FY 2021 Key Operating Expenses
RUB mln 12М2021 12М2020 change
Payroll and Social contributions 9,540 7,672 24.34%
as % of total Revenue 37.8% 40.1% (2.3p.p.)
Material expenses 5,568 3,850 44.63%
as % of total Revenue 22.1% 20.1% 2.0p.p.
Medical services expenses 335 398 (15.9%)
as % of total Revenue 1.3% 2.1% (0.8p.p.)
Functional expenses 187 189 (0.8%)
as % of total Revenue 0.7% 1.0% (0.2p.p.)
Gross profit
Gross profit in 2021 grew 40.1% y-o-y to RUB 9,988 mln. Gross profit
margin increased by 2.4 p.p. y-o-y to 39.6% as a result of business growth
driven by increased capacity utilisation and optimisation of key expenses.
Impact of key expenses
In the reporting period, the Company's key expenses remained tightly
controlled and decreased by 1.3 p.p. y-o-y as a percentage of revenue (to
62.0%) amid a decline in personnel costs and cost optimisation for medical
services.
The share of personnel expenses decreased by 2.3 p.p. y-o-y as a
percentage of revenue (to 37.8%), primarily due to the effect of operating
leverage and a personnel compensation structure in which a portion of
compensation is a fixed amount.
The share of materials expenses increased by 2.0 p.p. y-o-y as a
percentage of revenue (to 22.1%) on the back of growth in
material-intensive services in the Company's portfolio, including
chemotherapy, trauma care and therapy related to COVID-19.
The share of medical services expenses declined by 0.8 p.p. y-o-y as a
percentage of revenue (to 1.3%) due to the gradual vertical integration of
business processes, including the opening of the Company's own laboratory
and data processing centre.
The share of functional expenses remained virtually unchanged at 0.7% as a
percentage of revenue.
EBITDA
EBITDA grew 37.7% and amounted to RUB 8,276 mln in 2021. EBITDA margin
increased by 1.4 p.p. and amounted to 32.8% due to positive dynamics in
gross profitability.
Operating profit
Depreciation expenses as a percentage of revenue decreased by 1.2 p.p.
y-o-y to 6.7%. This decline was primarily due to growth of the Company's
business scale.
As a result, operating profit grew 47.0% y-o-y to RUB 6,622 mln in 2021,
with a margin of 26.3%.
Net profit
In 2021, net financial expenses grew 57.9% and amounted to RUB 456 mln.
This increase is due to a decline in financial income against the high
base effect in 2020 - the initial recognition of payables to the tax
authorities at the market rate.
As a result, the Company's net profit grew 41.8% y-o-y to RUB 6,143 mln in
2021. Net profit margin increased by 1.7 p.p. to 24.4%.
Key cash flow statement figures
RUB mln 12М2021 12М2020 change
Operating cash flows before working capital 8,346 6,051 37.9%
changes
Changes in working capital 158 474 (66.7%)
Taxes (5) (9) (50.9%)
Cash from operating activities 8,499 6,515 30.5%
Cash used in investing activities (2,912) (3,880) (24.9%)
Cash used in financing activities (5,031) (2,779) 81.0%
Cash and cash equivalents increase / (decrease) 557 (143) n/a
In 2021, operating cash flow before changes in working capital increased
by 37.9% year-on-year to RUB 8,346 mln as a result of growth in EBITDA.
Working capital
RUB mln December 31, 2021 December 31, 2020
Inventories 1,165 974
Accounts receivable 1,112 1,119
Accounts payable (2,537) (2,276)
Contract liabilities (1,990) (1,909)
The Company has historically maintained negative working capital as a
source of additional financing. Working capital remained negative at RUB
(2,250) mln and amounted to 8.9% of revenue in 2021.
Cash used for investing activities, mainly consisting of capital
expenditures and proceeds from short-term deposits, amounted to RUB 2,912
mln.
Total Capex decreased by 2.9% y-o-y to RUB 3,790 mln in 2021. The main
share of capital expenditures was in the hospital segment (84.6%), while
expenditures for construction of new clinics and current repairs accounted
for 15.4% of total expenditures.
In 2021, cash outflows related to financing activities amounted to RUB
5,031 mln vs. RUB 2,779 mln in 2020, mainly due to dividend payments in
the amount of RUB 2,905 mln.
As of December 31, 2021, net cash increased by RUB 557 mln to RUB 3,590
mln.
Debt load of the Group
RUB mln December 31, 2021 December 31, 2020
Total debt 5,513 6,818
Short-term debt 1,786 1,588
Long-term debt 3,727 5,230
Cash and cash equivalents 3,590 3,129
Bank deposits - 746
Net debt 1,924 2,943
Net debt / EBITDA 0.2х 0.5х
The Group's debt decreased by 19.1% y-o-y to RUB 5,513 mln at year-end,
mainly due to the repayment of long-term liabilities in the amount of RUB
1,504 mln. Cash balance grew 14.7% y-o-y to RUB 3,590 mln as of 31
December 2021 vs. RUB 3,129 mln as of 31 December 2020.
Net debt decreased by RUB 1,020 mln from 31 December 2020 to RUB 1,924 mln
as of 31 December 2021. The Company's debt is fully denominated in
roubles. The net debt to EBITDA ratio amounted to 0.2x as of 31 December
2021.
Notes:
1. This announcement contains inside information.
2. Minor deviations in the calculation of totals, subtotals and/or
percent changes are due to rounding.
3. The Group's consolidated financial statements are available on the
Group's website:
2 http://www.mcclinics.com/investors/financial-reports/
For further information please contact:
Investors
Media
Renata Battalova EM
Director of Investor Relations Tom Blackwell: +7 919 102 90 64
Tel.: +7 917 294 28 82 Sergii Pershyn: + 1 929 855 81 88
r.battalova@mcclinics.ru MDMG@em-comms.com
About MD Medical Group
MD Medical Group is a leading provider in the Russian private healthcare
service market. The Company manages 47 modern healthcare facilities,
including 8 hospitals and 39 out-patient clinics in 25 regions of Russia.
In 2021, MD Medical Group's revenue amounted to RUB 25.2 bln while EBITDA
amounted to RUB 8.3 bln. The Company's GDRs are traded on London Stock
Exchange (LSE: MDMG) and Moscow Exchange (MOEX: MDMG).
Currently, further to recent sanctions in connection with events in
Ukraine, in light of market conditions, and in order to maintain orderly
markets, the London Stock Exchange has suspended the admission to trading
of the Company's GDRs listed in London Stock Exchange.
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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3 1 Detailed information on operational results can be found in the
following 4 press release from 7 February 2022.
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ISIN: US55279C2008
Category Code: FR
TIDM: MDMG
LEI Code: 213800XKI6VHY4JBS612
Sequence No.: 151712
EQS News ID: 1312655
End of Announcement EQS News Service
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