NMC Health sees growth accelerate in third quarter

United Arab Emirates-focused healthcare provider NMC Health said its remains on track to hit full-year profits after stronger growth in the third quarter, driven bby a strong performance in its Healthcare division and a good recovery in Distribution.

Group revenue in the three months to September 30th increased by 13.9% from $108.3m to $123.4m, an acceleration from the 8.4% growth seen in the first half. The firm said that earnings before interest, tax, depreciation and amortisation (EBITDA) for the full year is expected to be in line with management's expectations.

Consensus estimates for the year ending December 31st are for revenue of £307.7m and pre-tax profit of £28.4m.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Chief Executive Officer Dr BR Shetty said: "NMC Health continues to perform well across both divisions. Occupancy levels in our hospitals are increasing, as we see continued demand for private healthcare services in the region and we increase our range of services available. Our Distribution Division has seen an improved performance this quarter, and we have attracted a number of new product lines through the year."

Healthcare revenues jumped by 17.5% on last year to $61.2m, driven by continued strong demand for private healthcare services in the region, as well as an increase in the number of higher revenue procedures, the group said. Occupancy improved by 6.8 percentage points to 59.4%.

Revenue in the Distribution division rose by 11.8% year-on-year to $70.2m, helping to offset the subdued performance in the first half. Distribution revenues grew by just 3.9% in the first half. "Gross margin levels also recovered from the levels experienced in H1, 2012 across most of the Distribution Division sectors," the firm said.

The firm said that while most capital projects are progressing well and to budget, the opening of Brightpoint Women's Hospital has been delayed and is now expected to take place in the second half of next year.

By the end of the period, the group had drawn down $120m under its credit facility; a further $30m is still available.

Total group debt totalled $248.8m, while cash and bank deposits stood at $223.2m.