MD Medical Group reports operational results for Q4 and FY 2018

24 January 2019, Moscow – MD Medical Group Investments Plc (“MD Medical Group”, “MDMG” or the “Company” – LSE: MDMG), a leading Russian private healthcare provider, today announces its operating results for the fourth quarter and 12 months of 2018.

Key operational highlights for Q4 2018:

• Total deliveries increased 10% year-on-year (y-o-y) to 1,838
• Total IVF cycles increased 1% y-o-y to 4,752
• Total in-patient treatments increased 22% y-o-y to 20,054
• Total out-patient treatments increased 8% y-o-y to 438,962

Mark Kurtser, CEO of MD Medical Group, said:

“In 2018, we continued to develop our business and have produced strong results. I would like specifically to highlight our performance in Q4 2018. Despite some demographic challenges in the country as a whole, we increased deliveries by 10% year-on-year during the quarter, which contributed to 7% growth for the full year. This growth was supported by the performance of our regional hospitals. In Q4 2018, we also increased in-patient and out-patient visits by 22% and 8% year-on-year, respectively, and grew the number of IVF cycles.

“The continued diversification of our medical services was another important trend in both Q4 and FY 2018. As a result, we significantly improved the performance of our Other Medical Services line. In particular, in-patient treatments in this segment grew by 67% year-on-year over Q4 2018.

“I would also like to highlight the results of the expansion of our network in the Russian regions. We opened a multi-disciplinary hospital in Samara, which saw high capacity utilization rates across all key segments and over its first 10 months of operations already passed breakeven, and we launched the construction of our St Petersburg and Lapino 2 hospitals. We also opened six new clinics, including in four new regions – Nizhny Novgorod, Volgograd, Tula, and Tatarstan – and modernised two existing clinics in Kostroma and Moscow.

“All of this forms a solid basis for the future sustainable growth of the Company.”

Deliveries

• In Q4 2018, total deliveries increased 10% y-o-y to 1,838.
• In FY 2018, total deliveries grew 7% y-o-y to 7,277.
• Key growth drivers in Q4 2018 were regional hospitals:
  • Deliveries at the Mother&Child Ufa clinical hospital grew 27% y-o-y.
  • Deliveries at the Novosibirsk hospital grew 50% y-o-y.
  • Ramp-up continues at the Mother&Child IDK hospital in Samara, which opened in March 2018. In Q4 2018, there were 127 deliveries at the hospital.

IVF

• In Q4 2018, total IVF cycles increased 1% y-o-y to 4,752.
• In FY 2018, total IVF cycles decreased 1% y-o-y to 16,636.
• In FY 2018, like-for-like (LFL) IVF cycles declined by 7% mainly due to some outflow of patients from existing clinics to the newly-opened hospital in Samara.
• Despite the decline in IVF volumes and an increase in the share of cycles carried out under the Mandatory Health Insurance (MHI) programme in FY 2018, the average check in this segment grew 8% y-o-y, mainly due to the expansion of the range of IVF services on a commercial basis.

In-patient treatments

• In Q4 2018, total in-patient treatments grew 22% y-o-y to 20,054 on the back of:
  • a 16% increase in paediatric in-patient treatments.
  • a 67% increase in in-patient days using other medical services driven by cardiology, oncology, traumatology, and surgery.
• In FY 2018, total in-patient treatments grew 18% y-o-y to 72,371. Key drivers included the continued ramp-up of the hospitals in Ufa and Novosibirsk, as well as the continued ramp-up in Samara.
• In FY 2018, LFL in-patient treatments increased 2% y-o-y to 62,319.

Out-patient treatments

• In Q4 2018, the total number of out-patient treatments increased 8% y-o-y to 438,962, driven by:
  • a 10% increase in OBGYN out-patient treatments.
  • a 12% increase in other medical services.
• a 12% increase in other medical services.
• In FY 2018, the total number of out-patient treatments increased 6% y-o-y to 1,618,149.
• In FY 2018, LFL out-patient treatments slightly increased 0.4% y-o-y to 1,533,557.