MD Medical Group reports 8% growth in Revenue in 1Q 2022

28 April 2022 – MD Medical Group Investments Plc (“MD Medical Group”, “MDMG” or the “Company”; LSE: MDMG), a leading Russian private healthcare provider, today announces its operating and unaudited financial results for the first quarter of 2022.

Key financial highlights for Q1 2022:

• Total revenue increased by 7.7% year-on-year (y-o-y) to RUB 6,208 million.

• Like-for-like (LFL) revenue grew by 6.2% y-o-y.

• Revenue of the Group’s Moscow hospitals increased by 7.3% y-o-y to RUB 3,467 million due to a recovery in demand for IVF (up 20.2% to 578 IVF cycles) and growth in utilization rate for such services as traumatology, urology and oncological surgery.

• Revenue of the Group’s regional hospitals grew by 9.5% y-o-y to RUB 1,459 million thanks to the success of the medical cluster in Tyumen and reaching target utilisation rate at IDK hospital in Samara.

• Revenue of the Group’s clinics in Moscow and the Moscow Region increased by 21.1% to RUB 610 million thanks to the recovery in demand for IVF (up 41.3% to 904 IVF cycles).Revenue of the Group’s clinics in other regions decreased by 4.1% y-o-y to RUB 669 million due to the late allocation of IVF quotas covered by the Mandatory Health Insurance (MHI) programme in some regions of the Russian Federation.

Key operational highlights for Q1 2022:

• Total out-patient treatments decreased slightly, by 1.3% y-o-y, to 433,246, with a 12.9% increase in the average check to RUB 5.3 thousand in Moscow/Moscow region and a 10.5% increase y-o-y to RUB 2.3 thousand in other regions.

• Total in-patient treatments decreased by 14.2% y-o-y to 34,498 due to the easing of the COVID-19 pandemic; at the same time, the average check increased by 41.5% y-o-y to RUB 96.2 thousand in Moscow and by 8.2% y-o-y to RUB 36.5 thousand in other regions.

• Total deliveries increased by 3.2% y-o-y to 2,008, while the average check rose by 8.5% y-o-y to RUB 488.7 thousand in Moscow and by 6.0% y-o-y to RUB 171.6 thousand in other regions.

• Total IVF cycles increased by 0.5% y-o-y to 3,603. The number of commercial cycles increased by 10.2%, while the number of cycles covered by MHI decreased by 9.1% due to the late allocation of quotas in regions.

Mark Kurtser, CEO of MD Medical Group, said:

“Amid a challenging external environment, MDMG demonstrated strong first-quarter results, and pushed ahead with diversifying its portfolio of services and progressing with its expansion into the Russian regions.

“We continued to operate as usual and demonstrated stable revenue growth, both in Moscow and other regions, with total revenue growing by 8% in the reporting quarter. This is tied, in part, to a gradual return of demand for elective treatments to pre-pandemic levels. In that regard, we are seeing a recovery in demand for IVF treatments in the wake of the pandemic, with IVF cycles increasing by 20% in Moscow hospitals and by 41% in our clinics in Q1.

“In the first quarter, we saw a decline in hospital load at Lapino-4’s Covid treatment facility as the pandemic subsided. At the same time, we saw growing demand in areas not related to healthcare for women and children, such as trauma care, urology and oncological surgery. This confirms our effective portfolio diversification strategy, which enables us to offer an increasingly varied array of medical services to our customers.

“During this challenging time, we are heartened to observe that medicine remains beyond geopolitical restrictions – the supply of medicines and medical equipment continues as before, and we are not experiencing any difficulties with deliveries.

“Looking ahead, we are moving forward with our planned expansion in the regions and expect to commission a new clinic in Yekaterinburg in the second quarter. We are also continuing to expand our Lapino medical cluster and are currently in the process of designing the core facility at Lapino-3, which will enable us to offer a full cycle of oncological services.

“I am pleased to say that the Company has a strong financial position and a low debt load, as a result of which we are not ruling out the payment of dividends before the end of the year.”

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About MD Medical Group

MD Medical Group is a leading provider in the highly attractive Russian private healthcare service market. Today, the Company manages 49 state-of-the-art healthcare facilities, including 10 multidisciplinary hospitals[1] and 39 out-patient clinics in 25 regions of the Russian Federation. In 2021, MD Medical Group’s revenue amounted to RUB 25.2 bln, with EBITDA of RUB 8.3 bln. The Company’s global depositary receipts are traded on the London Stock Exchange (LSE: MDMG) and Moscow Exchange (MOEX: MDMG).

Due to recent sanctions related to events in Ukraine as well as the current market environment, the London Stock Exchange has suspended the listing of the Company’s GDRs in order to maintain market stability.

[1] The number of hospitals is shown on a stand-alone basis. The Lapino medical cluster includes three hospitals: the Lapino-1 multifunctional hospital, the Lapino-2 cancer centre and the Lapino-4 COVID treatment facility.