MD Medical Group Reports 40% revenue growth in 2013
MD Medical Group Investments Plc (“MDMG”, the “Company”, or the “Group”), Russia’s leading provider of private women’s and children’s healthcare, announces its audited consolidated financial statements for the full year ended 31 December 2013 under International Financial Reporting Standards (IFRS).
The web cast of the conference call will be available till October 17, 2014 via the link

2013 Key Highlights

  • Revenue increased 40% for the third consecutive year to 5,673 mln RUB (2H’13 increased 20% to 3,095 mln RUB vs. 1H’13), supported in particular by the continued ramp up at Lapino and newly acquired clinics.
  • EBITDA for the year amounted to 1,586 mln RUB, Group EBITDA increased 46% from 1H 2013 to 2H 2013
  • EBITDA margin for the year was 28%, representing healthy growth in 2H’13 up by 5 p.p. h-o-h on the back of Lapino’s accelerating growth
  • CAPEX amounted to 3,080 mln RUB as MD Medical continues to invest in the construction and development of its facilities in addition to strengthening its market positions through M&A opportunities
  • Working capital retained negative accounting for (914) mln RUB keeping the year-on-year comparable share of 16% of revenue
  • Debt remained flat year-on-year accounting for 3,000 mln RUB with a net cash position of (275) mln RUB

2013 Financial Highlights (in RUB mln)

FY 2012

FY 2013

Change y-o-y, %


1H 2013

2H 2013

Change p-o-p, %

4 061

5 673




3 095


2 048

2 283


Gross profit


1 311


1 694

1 586









EBITDA margin, %



+ 5p.p.

2 646

3 080



1 401

1 679





Working capital




2 959

3 000



3 088

3 000


2013 Business Highlights

  • Continued successful ramp up at Lapino, with 1,220 deliveries during the first full year of operations (699 in 2H 2013, an increase of 34% vs. 1H’13). Deliveries capacity utilization reached 47% in 2H’13.
  • Successful acquisition and integration of IDK Medical Company, a well-established Samara-based chain of clinics focused on IVF, out-patient obstetrics and gynecology as well as paediatrics[1].
  • Acquisition of the only private reproduction centre in the Irkutsk region, which had previously operated through a franchise agreement with MD Medical Group[2].
  • Completed refurbishment of additional premises at the Clinic of Health in Moscow.
  • Opened a new dedicated in-vitro fertilisation (IVF) clinic in Yaroslavl, the first in the region.
  • Commenced construction of MDMG’s third hospital, a hospital in Ufa, the capital of Bashkortostan.

[1] Consolidated in the financial statements as of 01 April 2013
[2] Consolidated in the financial statements as of 01 May 2013

Commenting on the 2013 financial results, Elena Mladova, CEO of MD Medical Group, said:

“2013 was a year in which we strengthened further our leading position in Russia’s fast-growing private healthcare market, while continuing to execute on the strategy we presented to investors at the time of our IPO.

“We saw strong revenue growth of 40% year-on-year. The primary driver of this growth was of course Lapino, which contributed 1,093 mln RUB during the year. At the same time, our clinics in Samara, Irkutsk, Yaroslavl and Perm contributed a further 622 mln RUB to our total revenue.

“Our EBITDA for 2013 slightly decreased due to increased costs of the holding company driven by our transition from a “single hospital” model to a fast growing, national hospital chain and lower revenue from perinatal medical centre.

“However, as the ramp up at Lapino gathered pace, and we were able to apply group standards and create efficiencies at our new regional clinics, we were able to steadily increase our profitability as the year progressed. For example, our EBITDA and Net Profit increased from 1H ’13 to 2H ‘13 by 46% and 106%, respectively.

“Operationally, 2013 was an excellent year. We were successful in expanding our geographic footprint as we continued to execute our regional development strategy. We see Samara, Irkutsk and Yaroslavl as highly attractive regions and we now have a strong foothold upon which to build our business further in these areas.

“At the same time, we are very pleased with the progress in the construction of our hospital in Ufa. As we did with Lapino, we expect to take a phased approach to launching our services, and expect to have opened by early 2015.

“We enter 2014 with strong momentum. We are still to realize the full economic benefit of Lapino and the clinics we acquired or newly opened in 2013, and we expect them to have a continued positive impact on our margins in 2014. In addition, we continue to assess new growth opportunities, having already identified a number of new regions where we believe there is strong demand for our services, and into which there is significant potential to roll out our business model.”

Revenue Structure

Below is a breakdown of revenue structure by services. OBGYN continues to account for the largest share of our revenue, contributing just over 30%. The main reason for strong growth in revenue from deliveries was the successful ramp up at Lapino. IVF continues to be one of the fastest growing segments, with revenue from IVF amounting to nearly 14% during the year. The 86% growth in Other medical services was primarily due to the launch of new services which were offered at Lapino.



Change y-o-y, %

1Н 2013

2Н 2013

Change p-o-p, %

1 208

1 757


OBGYN, excl. deliveries




1 057

1 261























Other medical services







Other income




4 061

5 673



2 578

3 095


Operating expenses, excl. D&A

Cost of sales with general and administrative expenses, excl. D&A, on a like-for-like basis increased in line with Russian CPI, accounting for 2,450 mln RUB for the year. At the same time, total cash costs increased by 1,722 mln RUB, 73% year-on-year. This was due primarily to Lapino, which had its first full year of operations, as well as the consolidated costs of our acquired clinics in Samara and Irkutsk, and the increase in costs of the holding company following the IPO, driven by a transition from a “single hospital” model to a fast growing, national hospital chain. Although the Company will accomplish expansion of holding company in 2014, the growth rates of corresponding costs are expected to be significantly lower.

After a spike in costs shown in the first half of the year, in the second half the costs growth rates significantly slowed down, but still took place due to full 6 months of operations of Samara clinics. Revenue growth from 1H’13 to 2H’13 significantly exceeded the increase in costs, and looking ahead, the continued ramp up at Lapino should increasingly contribute to EBITDA margin.

CAPEX and Balance Sheet

Total CAPEX increased by 16% and amounted to 3,080 mln RUB in 2013 due to M&A deals in Samara and Irkutsk which accounted for 648 mln RUB.

Investments were also made into the construction of new hospital in Ufa, as well as in the repayment of payables for Lapino and the refurbishment of additional premises at “Clinic of Health Moscow”, which was successfully re-opened in May 2013.

As of December 31, 2013 Company’s debt amounted to 3,000 mln RUB retaining flat year-on-year.

The Group finished the year with a strong liquidity position of 3,275 mln RUB in cash, cash equivalents and investments remaining net cash positive.

Subsequent Events

The Board of Directors has recommended a dividend for 2013 of USD 0.07 per share, representing 30% of net profit attributable to owners of the Company. The record date and payment date for the aforementioned dividend will be announced on March 26, 2014.

As announced earlier this year, in February 2014 the vertical construction of the new Ufa hospital was completed ahead of schedule. Currently fit-out works and engineering services are underway, and we remain on track to open fully in early 2015.

Consolidated financial statements are available on the Company’s web site: {root}reports/financialreports/

Conference call:

The Company will host a conference call and webcast for investors and analysts on March 17, 2014 at 5.00 pm Moscow time (1.00 pm London; 9.00 am New York).

The call will be hosted by:

  • Mark Kurtser, Chairman of the Board of Directors
  • Elena Mladova, Chief Executive Officer
  • Vitaly Ustimenko, Chief Financial Officer
  • Elena Romanova, Head of Investor Relations

The dial-in and online viewing details are below:


Conference-call details:

  • Russia Toll Free: 8 10 800 2394 2044
  • Russia (to be used for call via mobile): 8 499 677 1060
  • UK Toll Free: 080 0073 8965
  • US Toll-Free Number: 186 6926 5708
  • International: 44 14 5256 0304

Access Code: 35687074

Please note that this call is only intended for investors and analysts.

For further information please contact:

Elena Romanova
MD Medical Group Investments Plc
Tel: +7 495 331 4357


Tom Blackwell / Sergii Pershyn
Tel: +7 495 363 2849

Consilium Strategic Communications
Emma Thompson / Matthew Neal
Tel: +44 20 7920 2354

About MD Medical Group

MD Medical Group operates in the highly attractive Russian private healthcare service market and has a leading position in high-quality women's health and paediatrics. The company manages 17 modern healthcare facilities, including 2 hospitals and 15 outpatient clinics in Moscow, St. Petersburg, Ufa, Perm, Samara and Samara region, Irkutsk and Yaroslavl. In addition, 3 franchised outpatient clinics operate in Kyiv, Ukraine.

The Company's main medical facilities are the Perinatal Medical Center (PMC), a 250-bed medical centre, which opened its doors in 2006, and Lapino hospital, a 182-bed medical centre, which opened at the end of 2012. In 2013, there were 3,816 deliveries in PMC and Lapino. The number of outpatient treatments for 2013 in PMC and the Company's outpatient clinics totalled 627,247. In March 2013, the Company began construction of its third hospital in Ufa. In April 2013 MD Medical Group completed the acquisition of the IDK Medical Company ("IDK"), a network of women's and children's health clinics located in the Russian region of Samara. In May 2013, the Company acquired Mother&Child clinic in Irkutsk, which had previously operated through a franchise agreement with MD Medical Group. The same month the Company completed a large-scale modernisation project of its Mother & Child Health Clinic in Moscow. In December 2013, a new outpatient clinic was opened in Yaroslavl which became the first healthcare facility in the region to provide IVF services.

The Company's shares have been listed on the London Stock Exchange (LSE ticker "MDMG") in the form of Global Depositary Receipts (GDRs) since 12 October 2012.

Forward-Looking Statements:

This press release contains forward looking statements, which are based on the Company’s current expectations and assumptions and may involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. The forward looking statements contained in this press release are based on past trends or activities and should not be taken that such trends or activities will continue in the future. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables which could cause actual results or trends to differ materially, including, but not limited to: conditions in the market, market position of the Company, earnings, financial position, cash flows, return on capital and operating margins, anticipated investments and economic conditions; the Company’s ability to obtain capital/additional finance; a reduction in demand by customers; an increase in competition; an unexpected decline in revenue or profitability; legislative, fiscal and regulatory developments, including, but not limited to, changes in environmental and health and safety regulations; exchange rate fluctuations; retention of senior management; the maintenance of labour relations; fluctuations in the cost of input costs; and operating and financial restrictions as a result of financing arrangements.

No statement in this press release is intended to constitute a profit forecast, nor should any statements be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for the Company. Each forward looking statement relates only as of the date of the particular statement.

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