Asklepios Group: Consolidated net operating income impacted by continuing coronavirus pandemic

In July 2020, Asklepios Kliniken GmbH & Co. KGaA completed the acquisition of RHÖN-KLINIKUM AG. As of the end of the third quarter of 2020, RHÖN’s results for July, August and September are included in the Asklepios Group’s financial statements for the first time. This first-time consolidation means that the published figures are comparable with neither the previous year nor the preceding quarters. The continuing COVID-19 pandemic had a negative impact on the Asklepios Group’s development in the period from January to September of the current financial year.

In the first nine months of 2020, the Asklepios Group’s revenue amounted to EUR 3,070.9 million (9M 2019 excluding RHÖN: EUR 2,637.3 million). Consolidated net operating income (EAT) for the period from January to September 2020 was impacted by depreciation, amortisation and impairment of EUR 197.4 million. In addition, the acquisition of RHÖN increased interest and similar expenses by around EUR 5.0 million. Overall, net operating income (EAT) for the period amounted to EUR 57.5 million (9M 2019 excluding RHÖN: EUR 84.0 million), corresponding to a return on sales of 1.7% (9M 2019 excluding RHÖN: 3.2%).

“The next few months will still be enormously challenging for us, both medically and economically. Bureaucracy and arbitrary political decisions are making it even more difficult to plan ahead – and this applies to all hospitals equally. A viable agreement is therefore essential for us. Although the adoption of the German Third Civil Protection Act is a start, it is not enough from our point of view,” emphasises Kai Hankeln, CEO of the Asklepios Group. “This makes it all the more important for us, together with RHÖN, to complement each other on many different levels, to learn from one another and establish a stable positioning together for the benefit of patients and employees. It can already been seen during the coronavirus pandemic that both companies are making a significant contribution to ensuring healthcare in Germany.”

In the period from January to September 2020, the healthcare facilities of the Asklepios Group, not including the RHÖN hospitals, treated a total of 1.25 million patients – representing a year-on-year decrease of more than 30% due to the pandemic (9M 2019: 1.86 million). The RHÖN hospitals treated around 607,000 patients in the same period. With 36,611 full-time equivalents on average, Asklepios had more employees than in the same period of the previous year (9M 2019: 36,098), while RHÖN also significantly increased its number of employees year-on-year to 18,242 (9M 2019 RHÖN: 17,899). Together with RHÖN, the Asklepios Group currently has around 32,508 beds.
On 28 October 2020, Asklepios took advantage of the good environment for transactions on the non-cyclical healthcare market and placed a schuldschein loan agreement of over EUR 730 million. The funds generated in this way were used entirely for refinancing, particularly for the early repayment of the acquisition financing that Asklepios borrowed in connection with the RHÖN transaction.

“The hospital market is very challenging at present. Financing security and a balanced maturity profile with financial flexibility are therefore extremely important to us, as well as optimisation of our capital costs,” says Hafid Rifi, CFO of Asklepios. “Our focus now is on continuing the integration of RHÖN and dealing with the coronavirus pandemic. This means that we need to take advantage of the strong structures and synergies for our healthcare facilities so that we can fulfil our healthcare mandate together –particularly in the context of the continuing coronavirus pandemic and the effects on our economic development.”

The effects of the COVID-19 pandemic will remain the defining issue for the healthcare sector for the rest of this financial year and beyond. The financial implications are still impossible to gauge in any detail. The respective German states’ payments for hospital operators has not yet been finalised. Potential regulatory restrictions and their influence on the remuneration structure will also make an impact. Regardless of this, Asklepios will proceed with RHÖN’s integration, further expand the strategic partnership and thus continue on its growth trajectory.

Our quarterly report for Q3 2020 and the corporate news can be found at www.asklepios.com/ir