EMC shows H1 2023 record net profit

Nicosia, Cyprus, 29 August 2023. United Medical Group CY PLC (hereinafter referred to as "the Company", together with its subsidiaries, "the Group" or "EMC", MOEX ticker: GEMC), a leading multidisciplinary provider of premium healthcare services in Russia operating under the European Medical Center brand, has announced its IFRS financial results for the six months to 30 June 2023 (H1 2023).

Key H1 2023 financial results

• The Group's consolidated revenue in H1 2023 amounted to EUR 139.2 million (a decrease of 0.4% y/y). The dynamics of the revenue level was influenced by the growth of revenue from sales of reagents and the growth of the average purchase amount.
• The Group's consolidated revenue in rubles amounted to RUB 11,508.3 million (an increase of 0.9% against H1 2022) as an effect of the weakening of the ruble exchange rate in the first half of the year.
• Revenue from outpatient and home care services for the first half of 2023 amounted to EUR 74.5 million (an increase of 4.5% y/y).  The main drivers of the growth were radiotherapy, radionuclide diagnostics, cosmetology and neurosurgery.
• Revenue from inpatient services for the first half of 2023 amounted to EUR 51.9 million (a decrease of 6.9% y/y), mainly due to a decrease in the number of chemotherapy procedures performed under the Compulsory Health Insurance, which had no impact on profit and was partially offset by growth in other areas as well as an increase in the average purchase amount for inpatient services.
• The Group's EBITDA for the first half of 2023 amounted to EUR 57.3 million (an increase of 10.9% y/y) due to cost control measures and operating profit growth, as well as the exchange rate realignment at the beginning of the year. The EBITDA margin was 41.2%, exceeding the level of 2021 (40.1% for 2021).
• The Group's net profit for the first half of 2023 amounted to EUR 54.2 million against a loss of EUR 4.0 million in the first half of 2022. The Group's functional currency is the euro and its strengthening at the beginning of 2023 had a significant positive effect on the revaluation of hedging financial instruments, as opposed to the opposite effect in the first half of last year.
• The Group's capex amounted to EUR 9.8 million (a decrease of 79.2% compared to the first half of 2022). In the first half of 2022, the capex increase was driven by the acquisition of the Astra 77 business, the market leader in equipment, reagents and services in the field of laboratory diagnostics. In the current period, capital expenditure for sustaining operating activities has returned to the average level of previous periods.
• EMC's net debt as of 30 June 2023 was EUR 102.7 million compared to EUR 165.7 million as of 31 December 2022. The ratio of Net debt to LTM EBITDA was 0.88x versus 1.49x in December 2022.

Key H1 2023 operating results

• The number of outpatient visits amounted to 204,513 (a decrease of 14.2% compared to the first half of 2022). The main decrease was in therapeutic areas, with most other areas showing an increase in visits.
• The average purchase amount for outpatient services amounted to EUR 364 (an increase of 21.8% compared to the first half of 2022), primarily for radiotherapy, oncology, endoscopy, therapy and dermatology.
• The number of hospital admissions amounted to 10,974 (a decrease of 19.5% compared to the first half of 2022), due to a reduction in the number of chemotherapy procedures provided under the Compulsory Health Insurance programs, which did not affect profits, since these services do not have a high marginality. At the same time, radiation and radionuclide therapy, plastic surgery, neurology and neurosurgery show steady growth.
• The average purchase amount for inpatient services amounted to EUR 4,726 (a decrease of 15.6% against the first half of 2022), primarily due to cosmetology, psychiatry, pediatrics, neurology and mammology.

Commenting on the H1 2023, EMC CEO Andrey Yanovsky noted:

"Our Company successfully overcomes challenges without changing its strategic priorities. In the reporting period, the management's efforts to improve operational efficiency made it possible to return to the 2021 profitability level and demonstrate record profit, while maintaining the uncompromising quality of unique medical services provided in accordance with international standards.

We are proud to be once again among the best companies in the world, being recognized not only by our clients but also by the international jury of Luxury Lifestyle Awards, a prestigious international award that recognizes exceptional achievements and top-level service of companies operating in the luxury segment.

In addition to the prestigious award, UMG has confirmed its membership in the International Hospital Federation (IHF). The IHF includes 140 members from 60 countries with more than 25,000 clinics and hospitals under its management.  In fact, EMC is the only one representing Russia in the international professional arena and, thanks to this, has access to the most effective practices and the latest treatment protocols, thereby contributing to the development of the entire industry.

The Company remains committed to implementing resource-saving, environmentally neutral solutions in the field of healthcare. Innovative technological approach allows us to significantly reduce the negative impact on the environment when providing medical services, thanks to which the European Medical Center was included in the TOP 1000 global companies in the field of sustainability and recognized as a pioneer in the field of sustainable healthcare by the jury of the International Sustainability Awards. The Company provides services in accordance with American and European protocols, giving patients access to the latest medical technologies without the need to travel abroad, including modern telemedicine complexes for remote instrumental diagnostics TytoCare Home and Pro. When creating the digital ecosystem, we focused on international standards and JCI prescribed protocols in the field of sustainability. When launching digital products over the past 5 years, we have systematically switched from using paper media to digital analogues, and, we can say, our customers "voted in rubles" — this is evidenced by the dynamics of consumption of our "electronic" products and services. In terms of purchasing consumables, it is our corporate policy to responsibly select suppliers and savings solutions. From 2019 to 2022, we significantly reduced the amount of paper consumed by the Clinic by transferring communications with customers into our digital products, which, according to experts, saved more than 150 trees from being cut down. 

European Medical Center not only has a first-class team of doctors who ensure the well-being of their patients, but also the most developed digital ecosystem (Private Clinic in Russia No. 1 according to the Digital Maturity Rating). The experience and knowledge of specialists from the USA, Europe, Israel and MEA form UMG expertise, allowing to give better results even in the most complex branches of medicine.

In the stock market, the Company strives for maximum transparency and openness. To ensure equal exercise of rights for all shareholders, in July the Group changed the depositary bank managing the depositary receipts program. As a result, shareholders have access not only to the standard ways of submitting instructions through European clearing systems, but also to alternative possibilities using the services of the depositary bank RCS Issuer Services S.ar.l. The next step in this direction will be the Company's redomiciliation to the special administrative region - Oktyabrsky Island of the Kaliningrad region. We very much expect shareholders to support this decision at the upcoming meeting.

I express my gratitude to our partners and investors for their trust and support in difficult conditions, and to the Company's professional team for the results achieved".

About the Company

EMC is a leading multidisciplinary provider of premium healthcare services in Russia with the longest track record of any major private healthcare business in the country^[1]. EMC is a fully integrated healthcare services provider and has extensive advanced capabilities in more than 57 specialisations, differentiating it from the competition in Russia. The Company utilises a patient-centric approach to its healthcare services offering, which allows it to provide patients with a full range of diagnostics and treatment services as well as offer tailor-made medical care.

EMC also is a leading Russian provider of cancer treatment with extensive expertise in a full range of modern oncology treatment methods and has state-of-the-art material and technical base and equipment. The clinic is staffed by doctors with international experience.

EMC’s network comprises six multidisciplinary medical centres, a perinatal and pediatric complex, a rehabilitation centre (with a total built-up area of approximately 87 thousand square metres), as well as a geriatric centre.

Company’s depository receipts have traded on Moscow Exchange since 15 July 2021 under the ticker “GEMC”.

Contacts for investors                                    Media contacts

Dmitriy Ivanov

Head of Investor Relations                                UMG PR

ir@emc-investor.com                                        pr@emcmos.ru

https://emc-investor.com/

https://t.me/emcinvestor                  

Important note

NEITHER THIS ANNOUNCEMENT NOR THE INFORMATION CONTAINED HEREIN IS FOR PUBLICATION, DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, INTO CANADA, AUSTRALIA, JAPAN OR THE UNITED STATES OR TO ANY PERSON IN ANY OF THOSE JURISDICTIONS OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE LAWS OF SUCH JURISDICTION.

This announcement is not intended to and does not constitute investment advice. This announcement does not constitute or form any part of and should not be constructed as an offer or commitment to sell or issue, a solicitation, recommendation, commitment or invitation to subscribe for, underwrite or otherwise acquire, and should not be construed as an advertisement for, any securities of United Medical Group CY PLC or any member of its group in any jurisdiction or an inducement to enter into investment activity in any jurisdiction.