MD Medical Group reports 21% increase in revenue for Q4 2023
Key financial highlights for Q4 2023:
- Total revenue increased by 20.6% year-on-year (y-o-y) to RUB 7,984 million thanks to double-digit revenue growth across all service segments in both Moscow and regional hospitals and clinics
- Revenue of the Group’s hospitals in Moscow rose by 21.6% y-o-y to RUB 3,992 million mainly due to an increase in revenue from out-patient treatments and IVF cycles
- Revenue of the Group’s regional hospitals increased by 17.9% y-o-y to RUB 2,073 million, driven by a significant increase in bed occupancy, number of out-patient treatments, and deliveries
- Revenue from out-patient clinics in Moscow and the Moscow Region rose by 14.6% y-o-y to RUB 810 million
- Revenue from regional out-patient clinics increased by 27.0% y-o-y to RUB 1,096 million.
Key operational highlights for Q4 2023:
- Total deliveries increased by 25.6% y-o-y to 2,579
- Total IVF cycles went up by 17.7% to 5,208
- Total in-patient treatments rose by 3.3% y-o-y to 40,613
- Total out-patient treatments increased by 19.0% y-o-y to 602,590
Key financial highlights for 12M 2023:
- Total revenue increased by 9.6% y-o-y to RUB 27,631 million thanks to growth in revenue of both Moscow and regional hospitals and clinics
- Like-for-like (LFL) revenue grew by 8.5% y-o-y
- Revenue of the Group’s hospitals in Moscow rose by 3.1% y-o-y to RUB 13,419 million mainly due to an increase in the number of IVF cycles and out-patient treatments in obstetrics and gynaecology, pediatrics, diagnostics, and telemedicine
- Revenue of the Group’s regional hospitals increased by 15.5% y-o-y to RUB 7,514 million driven by significantly improved utilisation of hospital delivery capacity in St Petersburg, Samara and Tyumen. As well as increased hospital inpatient capacity in Novosibirsk (traumatology and pediatrics), Samara (cardiology and pediatrics), and Lakhta (pediatrics and gynaecology), along with a simultaneous increase in the average ticket across all regional hospitals’ service segments
- Revenue from out-patient clinics in Moscow and the Moscow Region rose by 9.7% y-o-y to RUB 2,885 million on the back of stronger demand for IVF services and increased number of out-patient treatments
- Revenue from regional out-patient clinics went up by 23.6% y-o-y to RUB 3,780 million mainly due to an increase in the number of IVF cycles and their average ticket.
Key operational highlights for 12M 2023:
- Total deliveries increased by 15.3% y-o-y to 9,891, with the average ticket up 0.9% y-o-y to RUB 487.2 thousand in Moscow and up 11.5% y-o-y to RUB 201.9 thousand in other regions
- Total IVF cycles went up by 14.6% y-o-y to 19,326, with the average ticket up 6.0% to RUB 290.4 thousand in Moscow and up 10.1% y-o-y to RUB 270.0 thousand in other regions
- Total in-patient treatments decreased by 2.5% y-o-y to 146,342 due to the decline of the COVID-19 pandemic, with the average ticket down 1.8% to RUB 89.1 thousand in Moscow and up 14.7% y-o-y to RUB 39.8 thousand in other regions
- Total out-patient treatments went up by 11.4% y-o-y to 2,123,216, with the average ticket up 4.0% to RUB 5.5 thousand in Moscow and up 2.8% y-o-y to RUB 2.2 thousand in other regions.
Key events during Q4 2023 and after the reporting period:
- MD Group Michurinsky multifunctional hospital opened. In November 2023, the Group launched its new 8,755 sq m hospital acquired earlier in the middle of the year. The amount of investment in the project is estimated at RUB 2,840 million, including additional investment in medical equipment and building renovations
- Primary listing status on the Moscow Exchange obtained. On 7 November 2023, the Bank of Russia registered the prospectus of the Company's Global Depositary Receipts (GDRs) and admitted them to public trading in Russia. This completed the procedure initiated by the Company to change its listing status on the Moscow Exchange to primary
- Dividend policy approved. In December 2023, the Board of Directors approved the Company’s dividend policy, stating that MD Medical Group can pay dividends in the amount of up to 100% of net profit, including accrued net profit, if any, based on the Company's consolidated financial statements under IFRS for the past financial year, and based on interim financial statements for the purposes of interim dividends
- MD Group Zilart multifunctional family clinic launched. In January 2024, the Group opened a new 452 sq m multifunctional medical centre with an annual capacity of over 50,000 out-patient treatments. Total investments in the project exceeded RUB 81 million.
MDMG CEO Mark Kurtser said:
“We are thrilled by the remarkable revenue and operational performance achieved in the reporting quarter, fuelled by the resurgence of robust purchasing power, reproductive behaviour, and patient demand. Our revenue added over 20% y-o-y in Q4 2023 and 10% y-o-y in 12M 2023.
Women's and children's health services demonstrated consistently strong revenue growth. In 2023, the number of deliveries surged by 15% y-o-y, nearly reaching the milestone of 10,000, with a growth rate of 26% seen in Q4. These results were primarily driven by our Moscow hospitals, which enjoyed a capacity utilisation rate of over 70%.
The number of IVF cycles expanded by 18% and 15% in Q4 2023 and 12M 2023 respectively. I am delighted to acknowledge the remarkable IVF performance of our regional facilities, including a major contribution to the increase in deliveries by our recently launched hospital in St Petersburg and the impressive IVF results of regional clinics.
The patients’ care for their health is a driving force behind the growth in our out-patient treatments both in Moscow and other regions. Their total number across the Group increased by 19% and 11% in Q4 2023 and 12M 2023 respectively.
The opening of a new large hospital in Moscow’s Michurinsky Avenue in November 2023 and the launch of the new MD Group Zilart multifunctional family clinic in early 2024 is set to contribute to the Company’s growth and advancement in 2024. Our plans to further expand operations in Moscow and other regions are supported by a net cash year-end position of RUB 9 billion.
We are nearing the completion of the Company's redomiciliation to Russia and anticipate finalising it early in Q2 2024. This will enable us to resume dividend payments in line with the new dividend policy, which provides for dividends of up to 100% of the Company's net profit, including accrued profit from previous reporting periods.
I am grateful to our patients – for entrusting us with their health, to our shareholders and investors – for their strong support of our investment case, and to our management and medical staff – for their great teamwork and dedication. The accomplishments of MD Medical Group are the result of our shared commitment.”
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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About MD Medical Group
MD Medical Group is a leading provider in the highly attractive Russian private healthcare service market. Today, the Company manages 55 state-of-the-art healthcare facilities, including 11 multidisciplinary hospitals and 44 out-patient clinics in 27 regions of the Russian Federation. In 2023, MD Medical Group's revenue amounted to RUB 27.6 bln. The Company's GDRs are traded on Moscow Exchange (MOEX: MDMG).