Institut für Notfallmedizin (IfN) - Zentrum für medizinische Simulation
Positive growth and special items shape first half-year 2011
Consolidated earnings come under pressure from Greek write-down
In its first half-year 2011 results, Asklepios reported a sharp improvement in the number of treated patients which rose a strong 6.1 percent to over 857,000. Revenues also rose 6.0 percent over the same period to EUR 1,188.2 million (H1/2010: EUR 1,139.3 million). The income side was nevertheless offset by higher material costs and a non-cash-effective special effect which placed the group’s half-year results under considerable pressure, causing an extraordinary fall in profits to EUR 6.8 million (H1/2010 EUR 53.7 million).
“Despite the remarkable and pleasing growth in the number of patients treated, economic developments over the first half-year 2011 were a challenge for us, both from an operating perspective as well as in regard to out holdings in Athens Medical Center,” said Group CFO, Stephan Leonhard. “We are countering the disproportional rise in material costs – caused by price increases for medical supplies and a sharp increase in the number of freelance workers in rural areas, among others – by systematically ramping up our group-wide cost management efforts.”
First half-year earnings before interest, tax, depreciation and amortization (EBITDA) of EUR 100.4 million were slightly lower than for the same period last year (H1/2010: EUR 106.2 million). Regulatory, collective bargaining-related and inflationary pressures which could not be fully compensated for resulted in a lower operating margin of 8.5 percent. Half-year net income was EUR 6.8 million or EUR 44.3 million after adjustment for the special effect (H1/2010: EUR 53.7 million). The normalized return of sales was 3.7 percent or 0.6 percent before adjustment.
“Our EUR 37.5 million Greek write down has – in view of the significant deterioration in the country specific risk – a valuing background. The valuation of the Greek holding is thus set at a very low level, currently at just ca. 11% of the book value. Beyond this extraordinary step, however, the bigger picture paints Asklepios as an extremely healthy company in terms of its debt, equity ratio and financial reserves. We are optimally positioned to react to the recent increase in acquisition opportunities coming onto the market in Germany in recent times,” Stephan Leonhard continues.
Disparate operating developments in the individual clusters and regions in Germany
Asklepios Kliniken in Hamburg also made a significant contribution to earnings with a 6.2 percent rise in first half-year revenues, a 9.3 percent increase in EBITDA and an EBIDTA margin of 9.8 percent. This contrasts, however, with a lower EBITDA for the post-acute business due to current approval restrictions imposed by the German Statutory Pension Insurance Scheme.
In the first half-year 2011, Asklepios generated an operating net cash flow of EUR 74.8 million which was primarily used for repaying financial liabilities and investments – especially in medical treatment and in enlarging the group’s stakeholdings in Germany.
Net debt at the end of the quarter was EUR 463.6 million, of which EUR 203.4 million was attributable to subordinated capital. Excluding the subordinated capital, group indebtedness was 1.2 times EBITDA, compared to 0.9 times EBITDA per 31.12.2010.
The group has an equity capital ratio of 31.7 percent, rising to 42.1 percent if its subordinated capital is also taken into account. At the end of June 2011, the group had liquid funds and untapped credit lines of over EUR 550 million at its disposal for further growth and investment.
MediClin AG takeover bid completed
In the course of public takeover bid for MediClin AG conducted in the second quarter, the associated off-market purchase of 2 million shares and their posting in the framework of the takeover bid resulted in the group enlarging its holding in MediClin AG to approximately 34.7 percent. The original goals of the takeover bid have thus been fulfilled.
About Asklepios
With a ca. 20% market share, the Asklepios Kliniken GmbH healthcare group is one of the Top 3 operators of private hospitals and healthcare facilities in Germany. The clinic group pursues a responsible, sustainable, quality- and innovation-centric growth strategy. Since its formation over a quarter of a century ago, Asklepios’s faithfulness to these principles has rewarded it with dynamic growth. The group currently has 68 clinics with around 18,500 beds and ca. 35,000 employees across Germany. In FY 2010, over 1.6 million patients were treated at Asklepios establishments.