MD Medical Group announces operating results for Q2 2023

31 July 2023 – MD Medical Group Investments Plc (“MD Medical Group”, “MDMG”, “Group” or the “Company”; MOEX: MDMG), a leading Russian private healthcare provider, today announces its operating and unaudited financial results for the second quarter of 2023.

Key financial highlights for Q2 2023:

• Total revenue increased by 11.4% year-on-year (y-o-y) to RUB 6,632 million.

• Like-for-like (LFL) revenue grew by 10.8% y-o-y.

• Revenue of the Group’s hospitals in Moscow increased by 7.6% y-o-y to RUB 3,106 million as elective care and IVF recovered after the COVID-19 pandemic.

• Revenue of the Group’s regional hospitals grew by 14.8% y-o-y to RUB 1,869 million thanks to the strong operational performance of the medical cluster in Tyumen, the target utilisation rate achieved at IDK hospital in Samara, as well as the solid results of MD Group Lakhta hospital in St Petersburg.

• Revenue from out-patient clinics in Moscow and the Moscow Region rose by 7.2% y-o-y to RUB 719 million.

• Revenue from out-patient clinics in other regions rose by 22.1% y-o-y to RUB 930 million mainly thanks to the launch of the renovated Centre for Reproductive Medicine in Novosibirsk and a new clinic in Yekaterinburg.

Key operational highlights for Q2 2023:

• Total out-patient treatments increased by 9.0% y-o-y to 505,928, with the average ticket increasing by 2.5% to RUB 5.5 thousand in Moscow and by 1.6% y-o-y to RUB 2.2 thousand in other regions.

• Total in-patient treatments decreased by 3.8% y-o-y to 35,320, with the average ticket up 14.1% to RUB 87.5 thousand in Moscow and up 20.3% y-o-y to RUB 40.0 thousand in other regions.

• Total IVF cycles increased by 12.7% y-o-y to 5,209, with the average ticket increasing by 5.1% to RUB 280.0 thousand in Moscow and by 8.0% y-o-y to RUB 255.4 thousand in other regions.

• Total deliveries increased by 9.2% y-o-y to 2,295, with the average ticket decreasing by 7.4%   y-o-y to RUB 455.1 thousand in Moscow and rising by 15.6% y-o-y to RUB 202.8 thousand in other regions.

Key financial highlights for H1 2023:

• Total revenue increased by 5.7% year-on-year (y-o-y) to RUB 12,853 million.

• Revenue of the Group’s hospitals in Moscow declined by 2.6% y-o-y to RUB 6,190 million due to a decrease in COVID-19 diagnostic and treatment services in Q1 2023 driven by the pandemic slowdown, as well as fewer deliveries in Moscow amid the overall downward trend in Russia’s birth rate.

• Revenue of the Group’s hospitals in regions grew by 14.6% y-o-y to RUB 3,538 million.

• Revenue of the Group’s out-patient clinics in Moscow and the Moscow region increased by 6.2% to RUB 1,360 million.

• Revenue of the Group’s out-patient clinics in other regions grew by 22.6% y-o-y to RUB 1,753 million.

Key operational highlights for H1 2023:

• Total out-patient treatments increased by 8.4% y-o-y to 991,887.

• Total in-patient treatments decreased by 1.1% y-o-y to 70,715.

• Total IVF cycles increased by 13.7% y-o-y to 9,349.

• Total deliveries increased by 9.6% y-o-y to 4,502.

Key events during Q2 2023 and after the reporting period:

• Launching the procedure for changing the GDR programme depositary. On 10 April 2023, MD Medical Group launched the procedure for changing the depositary bank that administers the Company’s Global Depositary Receipts (GDR) programme. RCS Issuer Services S.A.R.L. was appointed as the new depositary bank. This process will take about 120 days[1].

• Delisting of GDRs from the London Stock Exchange. Following the Group’s applications submitted to the UK Financial Conduct Authority (the “FCA”) and the London Stock Exchange (the “LSE”), the Company’s global depositary receipts were removed from the FCA’s Official List and their admission to trading on the LSE has been cancelled as of 22 June 2023.

• Completing the acquisition of a hospital in Moscow. On 17 July 2023, MD Medical Group completed the acquisition of a ready for service hospital in Moscow. The Company plans to use the existing facilities of the asset to launch a new multidisciplinary hospital MD Group Michurinsky in the second half of 2023. The amount of investment in the project is estimated at RUB 2,840 million, including additional investment in medical equipment and building renovations. The project will be financed from the Group’s own funds.

Mark Kurtser, CEO at MDMG, said:

"We are pleased with the Company’s Q2 2023 performance, which exceeded our expectations. Patient flows in Moscow hospitals have been gradually normalising across all business lines, and we have also seen stronger demand for delivery services in regional hospitals and IVF services in clinics and hospitals. Among other factors behind the Group’s strong results was the high growth rates of medical care in the commercial segment. 

“Our new assets – MD Group Lakhta hospital in St Petersburg and clinic with a focus on IVF in Yekaterinburg – have achieved efficiency gains, heading towards their planned capacity rates and maintaining potential for further growth. During the reporting period, the revenue of MD Group Lakhta increased more than threefold, and the Mother & Child Yekaterinburg clinic launched in November 2022 already achieved a 50% utilisation rate.

“The strong operational performance has driven impressive financial results, with revenue up across all business segments and total revenue growth of 11.4% in Q2 2023.

“In July 2023, we completed a deal to acquire a fully operational hospital in Moscow with plans to use this asset to launch the MD Group Michurinsky hospital in the second half of the year. The acquisition comes as a significant milestone for the Group that will help us ramp up our capacities in Moscow and leverage the hospital’s favourable location to provide more patients with our high-quality medical services. The MD Group Michurinsky medical centre will implement a Smart Hospital concept, creating a unique environment that ensures safety during treatment, access to the state-of-art medical equipment, and superior building systems, including ventilation and temperature control in operating theatres.

“As part of our strategy to expand the Group’s portfolio of medical services, we are introducing a new format of outpatient clinics with a focus on multidisciplinary care. By the end of 2023, we plan to open two clinics of this kind – one in Moscow City and one in ZILART residential complex – to further solidify our presence in Moscow.

“The second quarter has been a successful follow-up to the beginning of the year, with strong operational momentum in July giving us every reason to expect further growth in our operational and financial results alike.”

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

***

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 and 39 out-patient clinics in 26 regions of the Russian Federation. In 2022, MD Medical Group's revenue amounted to RUB 25.2 bln while EBITDA amounted to RUB 7.9 bln. The Company's GDRs are traded on Moscow Exchange (MOEX: MDMG).

[1] As of the date of the press release published on 10 April 202