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NMC's revenues rose to $273 million in the first half of the year, up by 14.7 per cent over the same period last year. Ravindranath K / The National
NMC's revenues rose to $273 million in the first half of the year, up by 14.7 per cent over the same period last year. Ravindranath K / The National

NMC to expand health division with new hospital in Al Ain

NMC group improved its pre-tax profits to $32.3 million in the first half of this year, up by 17 per cent from the same period last year, riding on better average per patient revenue.

The Abu Dhabi-based hospital group NMC will add a facility in Al Ain's industrial area in 2015.

The increasing number of patients at the group's three speciality hospitals in the capital, Dubai and Al Ain has helped the group to increase its net profits to US$32.3 million in the first half of the year, up from $27.5m in the same period last year.

The conglomerate is also a supplier of food, medicine and cosmetics to pharmacies, hospitals, groceries and wholesalers. It owns eight pharmacies.

Rises in the average revenue per patient and occupancy levels, particularly at Abu Dhabi Specialty Hospital, were identified as key drivers in the growth of the health division.

"We are focusing more on specialty services and increasing the types of services," said Binay Shetty, the chief operating officer at the company that has a market cap of 621m (Dh3.52 billion).

The company's ownership is split between pre-IPO stakeholders with 67 per cent of the shares, and the rest being held by institutional shareholders.

The average revenue per patient touched $112, an increase of 9.2 per cent, and the occupancy rates stood at 63.6 per cent from January through June. A price cap by the UAE Ministry of Health on medicines deemed expensive was set in June.

"We expect any negative impact to our distribution business to be offset by a positive impact to our retail pharmacy business and therefore we expect the overall impact to be negligible," Mr Shetty said.

The group revenues rose to $273 million in the first half of the year, up by 14.7 per cent over the same period last year, and those of the healthcare division rose to $143m, up by 17.3 per cent. There was also an increase by 13.5 per cent the number of beds at NMC's hospitals in the first six months of the year.

The number of doctors at the facilities also rose to 440 in June over 392 in last June, especially at Dubai's BR Medical Suites, which the Abu Dhabi-based company acquired last July. It expects to open an additional facility in Al Ain's Sannaiya industrial area in the second half of next year at a cost of $7m.

The price per share of NMC, which is listed on the London Stock Exchange, increased by 67.73 per cent year-to-date. The shares were trading at 348 pence late afternoon Tuesday, up as much as 5.5 per cent over Monday's close.

The results met with positive analyst expectations.

London-based Numis Securities' Charles Weston increased his price target for the company significantly to 500 pence, and has a "buy" rating on the shares. "The addition to a new medical centre to the pipeline was an indicator of future growth opportunities," he said.

The positive news from NMC and Al Noor Hospitals Group, which introduced its IPO in June, will encourage other UAE companies to list, Mr Weston said. Al Noor's shares were trading at 800 pence in the late afternoon yesterday, up 2.24 per cent from Monday's close. Dubai's DM Healthcare, too, is eyeing an IPO in three years' time.

The opening of the 50-bed, $30m Brightpoint Maternity Hospital in Abu Dhabi has been yet again delayed to first half of next year, while that of the 75-bed Khalifa City Hospital is postponed to the first half of 2015. It will cost $200m.

The Dubai Investment Park General Hospital has been delayed to the first half of next year.


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