MD Medical Group announces operating results for Q2 2022

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

• Total revenue increased by 1.3% year-on-year (y-o-y) to RUB 12,159 million.

• Like-for-like (LFL) revenue was flat y-o-y.

• Revenue of the Group’s hospitals in Moscow decreased by 4.3% y-o-y to RUB 6,355 million due to a lower utilisation rate at the Lapino-4 COVID treatment facility as the pandemic subsided.

• Revenue of the Group’s hospitals in regions grew by 12.4% y-o-y to RUB 3,087 million thanks to the strong operational performance of the medical cluster in Tyumen[1], target utilisation rates achieved at IDK hospital in Samara, as well as the MD Lakhta hospital shifting its focus to the core business of women’s and children’s healthcare.

• Revenue of the Group’s out-patient clinics in Moscow and the Moscow region surged by 13.5% to RUB 1,281 million thanks to the recovery in demand for IVF following the pandemic.

• Revenue of the Group’s out-patient clinics in other regions dropped by 3.7% y-o-y to RUB 1,430 million due to the late allocation of IVF quotas covered by the Mandatory Health Insurance (MHI) programme in some regions of the Russian Federation. The allocated quotas will be used in the upcoming quarters of 2022.

• Total out-patient treatments decreased slightly, by 2.1% y-o-y, to 878,458, with a 11.7% increase in the average ticket to RUB 5.4 thousand in Moscow/Moscow region and a 10.9% increase y-o-y to RUB 2.3 thousand in other regions.
• Total in-patient treatments decreased by 7.4% y-o-y to 70,937 due to the easing of the COVID-19 pandemic; at the same time, the average ticket increased by 22.2% y-o-y to RUB 91.5 thousand in Moscow and by 1.6% y-o-y to RUB 34.7 thousand in other regions.
• Total IVF cycles increased by 0.8% y-o-y to 8,223, with a 4.9% increase in the average ticket to RUB 264.4 thousand in Moscow/Moscow region and a 4.9% increase y-o-y to RUB 235.2 thousand in other regions.
• Total deliveries increased by 2.0% y-o-y to 4,109, while the average ticket rose by 4.6% y-o-y to RUB 490.0 thousand in Moscow and by 6.0% y-o-y to RUB 173.6 thousand in other regions.

• Novosibirsk Centre for Reproductive Medicine renovated. On 16 June 2022, MD Medical Group completed the renovation of its medical centre in Novosibirsk, increasing its capacity to 1,000 IVF cycles per year and investing around RUB 23 million.
• Medical centre opened in Moscow. On 23 June 2022, MD Medical Group opened a new outpatient medical centre, Mother&Child Butovo, with a capacity of 30,000 visits per year and some RUB 16 million invested in the project.

“In H1 2022, despite macroeconomic woes, we delivered strong results while working hard to improve our services and operational efficiency and maintain a solid financial position.

“We are happy with the Company’s H1 performance, as a decline in the utilisation rate expected at the Lapino-4 COVID treatment facility amid the fading pandemic was offset by robust demand for women’s healthcare, with its revenue for the period up by 7%. I am also pleased to note that we have been successfully diversifying our services. In particular, we see stable demand in non-core segments, such as trauma care, oncology and cardiology, with their share in the Group’s H1 revenue at 49%.

“Our new projects are also performing strongly and are on track to reach their respective design capacities. In the first three months after MD Lakhta was converted back into a clinical hospital, we performed about 90 deliveries, and we continue to increase patient flows. Meanwhile, our Tyumen medical cluster, which includes the Tyumen-1 multidisciplinary hospital and Tyumen-2 COVID treatment facility (launched in February 2022), achieved a 25% revenue growth and a 35% utilisation rate in H1 2022, still having a significant potential to support the Group’s future growth.

“We see a gradual recovery of patient flows and deferred demand for IVF after the COVID-19 pandemic. In H1 2022, the number of IVF cycles was up by 18% in Moscow hospitals and 22% in outpatient clinics in Moscow and the Moscow Region.

“Thanks to effective steps taken to ensure sufficient liquidity, our financial standing remained stable. It was for the first time in the Company’s history that we posted negative net debt.

“MD Medical Group keeps up the momentum, increasing the availability of its services in Moscow and beyond. In June 2022, we opened a new clinic in Butovo and renovated our medical centre in Novosibirsk. We are also about to launch outpatient clinics in Yekaterinburg and Moscow and working to build a Lapino-3 nuclear medicine centre.

“I am also very happy to say that MGIMO Med, a medical university created jointly with MGIMO, has started accepting applications, with the first intake scheduled for September.

“Despite the H1 turmoils, we were able to maintain a strong financial position and deliver robust operational results, so we do not rule out the possibility of paying dividends before the end of the year.

“We proceed with our strategy of diversifying the Group’s services and growing both organically and through acquisitions.”

 Notes:

1.     Data is based on management accounts

2.     Minor variations in calculation of totals, subtotals and/or percentage change are due to rounding of decimals

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MD Medical Group is a leading provider in the highly attractive Russian private healthcare service market. Today, the Company manages 50 state-of-the-art healthcare facilities, including 10 multidisciplinary hospitals and 40 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). 

[1] The Tyumen medical cluster includes the Tyumen-1 multifunctional hospital and the Tyumen-2 COVID treatment facility.