Asklepios Group: Stable development in H1 2023 despite challenging market environment

Asklepios Kliniken GmbH & Co. KGaA recorded stable development in the first half of 2023 in a challenging market environment. Despite the continued strain due to inflation and high staff costs, it actively increased the level of investment in its hospitals.

In the first six months of 2023, a total of 1,708,321 patients were treated at Asklepios Kliniken healthcare facilities (6M 2022: 1,749,734). The number of cost weights came to 299,982 in the first half of 2023 (6M 2022: 298,202), representing a slight improvement on the same period of the previous year. The number of employees expressed as full-time equivalents remained essentially unchanged year-on-year at 49,503 (6M 2022: 49,796).

In the first six months of 2023, the Asklepios Group generated consolidated revenue of EUR 2,708.4 million (6M 2022: EUR 2,608.9 million), representing revenue growth of 3.8%.

Higher energy costs and price increases for food and medical supplies were reflected in the cost of materials. The absolute cost of materials outpaced revenue growth, increasing by EUR 39.8 million or 6.3% from EUR 633.5 million to EUR 673.3 million. The cost of materials ratio rose by 0.6 percentage points to 24.9% compared to the first six months of 2022 (6M 2022: 24.3%).

Absolute staff costs climbed by EUR 105.9 million or 6.1% to EUR 1,840.6 million, particularly due to general collective wage increases, with the staff costs ratio rising from 66.5% to 68.0%.

The other expenses ratio also increased slightly year-on-year to 8.7% (6M 2022: 8.6%). Overall, consolidated net income (EAT) for January to June 2023 amounted to EUR 45.6 million, which was lower than in the same period of the previous year (6M 2022: EUR 55.1 million). The EAT margin fell to 1.7% (6M 2022: 2.1%).

“The situation in the German healthcare sector remains tense, with inflation, shortages of specialist staff and chronic underfunding putting growing strain on the healthcare system. Asklepios is working to make the lasting improvements in the general conditions that are so essential,” says Kai Hankeln, CEO of Asklepios Kliniken. “Systematic digitalisation, a shift towards outpatient care where appropriate and a significant reduction in bureaucracy remain the key elements for achieving this. With the upcoming hospital reform, we now have the chance to lay the foundations for a sustainable healthcare system in Germany. This is an opportunity we must not waste.”

As a financially conservative company, the Group’s financing profile is fundamentally geared towards the long term. Accordingly, the underlying loan volumes are also largely hedged against interest rate risks on a long-term basis. In addition to cash and cash equivalents of EUR 641.5 million (31 December 2022: EUR 634.6 million), the Group has unutilised credit facilities of around EUR 672.7 million at its disposal (31 December 2022: EUR 695.1 million).

The high internal financing power and the relatively moderate level of net debt protect the Group from financial market risks while also allowing it to systematically implement its investment strategy. The share of own funds rose by 10.2% to EUR 90.3 million (6M 2022: EUR 81.9 million). Capital expenditure is fully financed by cash flow from operating activities. Without deducting subsidies, capital expenditure amounted to EUR 147.1 million (6M 2022: EUR 118.9 million).

Hafid Rifi, CFO of Asklepios Kliniken: “The planned hospital reform leaves many questions unanswered when it comes to financing our infrastructure. We urgently need planning certainty and an approach that is coordinated with those operating in the sector. The liquidity of all regionally important hospitals must be guaranteed if we are to continue to ensure the reliable provision of care throughout Germany.”

The actual implementation of the proposed reforms will also be crucial for Asklepios Kliniken and will significantly influence hospital planning over the coming years. For this reason, the Asklepios Group is actively contributing to dialogue with political players together with the Federal Association of German Private Hospitals and is supporting the initiative www.krankenhausretten.de.

Asklepios currently also expects the second half of 2023 to be challenging. In view of the uncertain general economic outlook, Asklepios is refraining from issuing a specific forecast. However, Asklepios’ goal for the year as a whole remains to improve its operating earnings.