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Abu Dhabi, UAEWednesday 17 October 2018

Abu Dhabi-based NMC Health invests $32 million in Saudi healthcare projects

NMC Health bought a 70 per cent stake in As Salama Hospital in Al Khobar for $28m and invested $4m in a start-up in Jeddah.

Abu Dhabi’s NMC Health is targeting the long-term care market in the region’s biggest economy.

London-listed NMC Health invested US$32 million in Saudi Arabia in its profitable long-term care segment as the country opens up to privatisation.

The Abu Dhabi company bought a 70 per cent stake in As Salama Hospital in Al Khobar for $28m and invested $4m for a 67.5 per cent share in another long-term care facility in Jeddah, it said. It represents the first expansion outside the UAE in long-term care services.

The long-term and home care segment is NMC’s highest earner, with revenue per patient at its highest at $8,611 during the first half. In the UAE, NMC operates 146 long-term care beds. It acquired Provita in the long-term care and Americare in the home care segment last year.

The company is also in the final stages of opening five fertility centres in the UAE, Qatar and Oman, the company confirmed.

Expensive maternity and fertility services rake in more than its multispeciality hospitals. Revenue per patient at its 100 maternity and fertility beds in the UAE and Europe was $636.20 during the first half, compared to $131 at its multispeciality hospitals, accounting for 629 beds.

NMC’s acquisition in Al Khobar will add 140 long-term care beds, while the Jeddah deal will add 120 beds. NMC’s unit Provita will manage the Jeddah facility, which is expected to start operations by the end of the year.

The Saudi entities are expected to deliver $5m each in earnings before interest, taxation, depreciation and amortisation next year.

The Saudi healthcare market has become attractive for foreign investors as the government encourages privatisation to share healthcare costs. The larger Saudi population compared to NMC’s home market is also an incentive.

Unlike both the UAE and Qatar, where nationals account for 15 to 20 per cent of the population, in Saudi Arabia about 65 per cent of the nearly 30 million residents are nationals, according to the company. “Expatriate long-term care patients would eventually have to be repatriated to their home countries, and therefore cease to be part of domestic demand for long-term care services,” the company said.

Long-term care patients account for 25 to 35 per cent of Saudi hospital capacity, according to NMC.

Other operators are also targeting the sector.

Dubai’s Amanat Holdings entered the market last year. It has a 33.2 per cent stake in the hospice care provider Sukoon International Holding. A majority of Amanat’s second quarter profit came from Sukoon at Dh4.8m.

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