Asklepios Kliniken: Coronavirus pandemic still having an impact in H1 2021

Asklepios Kliniken GmbH & Co. KGaA ended the first half of 2021 on a solid footing and is preparing the ground for a gradual return to normal hospital operations. Consolidated revenue and consolidated net income (EAT) held steady year-on-year, although the previous year’s figures are comparable only to a limited extent due to the first-time consolidation of Rhön-Klinikum AG on 1 July 2020. Despite the slow resumption of normal operations, Asklepios is expecting the pandemic to be with the healthcare sector for a long time to come. Investment from own funds was maintained at a high level despite the challenging circumstances.
In the period from January to June 2021, the Asklepios hospitals treated a total of 1,447,999 patients (6M 2020: 1,084,287) at their healthcare facilities, with the increase mainly attributable to the acquisition of Rhön-Klinikum AG in the second half of 2020. At the same time, the hospitals are increasingly catching up on the backlog of elective treatments that were postponed because of the pandemic.     The number of cost weights, including Rhön, came to 300,185 in the first half of 2021 (6M 2020: 205,879).

The Asklepios Group generated revenue of EUR 2,526.4 million in the first six months of 2021 (6M 2020: EUR 1,814.8 million). The year-on-year increase is due chiefly to the first-time consolidation of Rhön-Klinikum AG. Considered in isolation, the Asklepios hospitals reported revenue of EUR 1,861.5 million in the first half of 2021, equating to organic growth of around 2.6%. Consolidated revenue includes coronavirus compensation payments totalling EUR 209.6 million.

EBITDA amounted to EUR 231.2 million in the first six months of the year (6M 2020: EUR 172.6 million), with EBIT totalling EUR 79.1 million (6M 2020: EUR 54.7 million). The EBITDA margin fell to 9.2% (6M 2020: 9.5%). The cost of materials ratio went up year-on-year to 24.1% (6M 2020: 20.3%), while the staff costs ratio stayed on a par with the previous year at 66.7% (6M 2020: 66.9%). Absolute staff costs rose by EUR 471.8 million to EUR 1,686.1 million (6M 2020: EUR 1,214.3 million) for a number of reasons including the significant 12,088 rise in our full­time workers as a result of the integration of Rhön-Klinikum AG to a total headcount of 48,621 (6M 2020: 36,533) as well as general wage increases.
Consolidated net income (EAT) for January to June totalled EUR 43.0 million, which is higher than the previous year’s figure (6M 2020: EUR 21.8 million) and corresponds to an EAT margin of 1.7% (6M 2020: 1.2%). EAT is influenced mainly by high staff costs and increased material costs on account of the coronavirus-driven considerable cost increases for personal protective equipment and for hygiene and laboratory supplies.

“Looking at the rapid spread of the Delta variant and rising infection rates, it is obvious that the pandemic is nowhere near over – despite the nationwide vaccination campaign. But it is also true to say that we have learned our lessons from the past eighteen months and step by step we have reinstated normal operations at our hospitals,” said Kai Hankeln, CEO of the Asklepios Group. “More and more patients are returning to us to receive treatment for acute medical conditions, but also equally to undergo treatments that had been postponed. So we are cautiously optimistic as we look to the months ahead.”

The Asklepios Group’s financial position was stable at the end of the first half of 2021. The Group’s net debt came to EUR 1,363.6 million as at 30 June 2021 (31 December 2020: EUR 1,466.6 million). Cash and cash equivalents increased to EUR 707.2 million (31 December 2020: EUR 548.5 million). The ratio of net debt to EBITDA for the past 12 months was 3.3x (31 December 2020: 3.8x).

Despite the existing pandemic-related challenges, Asklepios is keeping to its investment strategy and continuing to invest in its healthcare facilities and strategically important projects, with a particular view to advancing the digitalisation of the hospital group. The company invested a total of EUR 146.9 million including subsidies in the first half of 2021 (6M 2020: EUR 138.2 million). The percentage of own funds was EUR 110.6 million and accounted for roughly 75.3% of the total investments (6M 2020: 75.0%). Net cash from operating activities came to EUR 261.7 million in the first six months of 2021 (6M 2020: EUR 289.5 million).

“Alongside the coronavirus pandemic, the first half of the year was defined by the post-merger integration of Rhön. We established selected projects and synergies that will strengthen our shared healthcare facilities – and not just from a financial perspective. We are aiming to keep up our strong level of investment,” emphasised Hafid Rifi, CFO of the Asklepios Group. “The pandemic has highlighted the ground that needs to be made up in terms of digitalisation across many areas of the healthcare sector. For years, Asklepios has been an exception to the rule as we took steps early on to focus the digitalisation of the whole Group and advance it further through a series of selected, well-considered concepts.”

Business development over the remainder of the financial year will hinge in particular on the speed at which Germany can finish vaccinating its entire population. At this moment in time, it is still not entirely possible to fully determine when hospitals will be operating normally again and will be able to catch up on the backlog of postponed operations that has been building over recent months. Asklepios will continue to play its part in the pandemic effort and ensure it delivers the best possible medical care.
 
About Asklepios
Asklepios Kliniken is one of the leading private operators of hospitals and healthcare facilities in Germany. The hospital group stands for highly qualified care for its patients, with a clear commitment to medical quality, innovation and social responsibility. On this basis, Asklepios has been developing dynamically since it was founded over 35 years ago. The Group currently has around 170 healthcare facilities throughout Germany. These include acute care hospitals of all different care levels, university hospitals, specialist clinics, psychiatric facilities, forensic institutions, rehabilitation clinics, nursing homes and medical centres. In the 2020 financial year, over 2.6 million patients were treated at the Asklepios Group’s facilities. The company has more than 67,000 employees.