UAE's biggest publicly traded healthcare provider to get boost from removal of co-payment rules
NMC Healthcare first half profit jumps 39 per cent on back of new acquisitions
NMC Healthcare, the biggest provider of healthcare in the UAE by market value, said first half profit rose 39 per cent, boosted by income from newly acquired operations including Al Zahra Hospital in Sharjah.
Net profit rose to $97.8 million in the first six months of the year compared to $70.5m in the year-earlier period. Revenue increased 34 per cent to $775.2m in the first half compared to $578.3m in the first six months of 2016. Total patients served by NMC advanced 36.2 per cent in the first half to 2.88m compared to 2.11m in the same period last year.
"The first half of 2017 has seen strong performance from our acquired businesses, newly opened facilities as well as continuing growth in our mature facilities," said Prasanth Manghat, NMC Health's chief executive officer.
"Our acquisitions in Sharjah are performing well and we are very pleased with initial performance from our new Saudi Arabian and Oman operations, as we start to diversify operations from our primary UAE market in the GCC and beyond."
The company, whose shares are traded in London, said that it expects the removal of co-payment requirements on Thiqa insurance by the Health Authority in Abu Dhabi in April to have a positive impact on its businesses in the second half and beyond.
Abu Dhabi last year issued new insurance rules, where Emiratis must pay for a greater proportion of their private-sector treatment. That’s eroded some earning potential of number of health care providers working in the Emirate.
The introduction of a 20 per cent co-pay requirement in Abu Dhabi for Emiratis seeking private health care began on July 1. A move to include long-term health care in the new system was eventually scrapped earlier this year after consumer complaints to the local health authority over the affordability of fees that can amount to Dh60,000 or more per month. Overall, however, the introduction of co-pay has dented the industry as many are put off seeking treatment in the private sector.
Shares of the Abu-Dhabi based company gained as much as 5.7 per cent in London, reaching an all-time high after the company disclosed its results, according to Bloomberg.
As part of its expansion plans, the company is keen on widening its footprint in Saudi Arabia, the Arab world's largest economy.
"Saudi Arabia is a significant and strategically important market in the Middle East and is seen as a key future market for growth in the group," the company said.
The healthcare provider has also been on an acquisition spree. NMC's fertility business was enhanced by the acquisition in January last year of Fakih IVF as well as growing returns from Brightpoint Royal Women’s Hospital, a maternity hospital in Abu Dhabi that opened in 2014.
NMC also acquired long-term medical care provider Provita in June 2015 for $160.6m from the private equity company TVM Capital Healthcare Partners and its partners.