RIYADH — Dr. Sulaiman Al Habib Medical Group (HMG), Saudi Arabia’s largest private medical services provider, has announced its financial results for the 3-month period ended March 31 2020.

First quarter revenue increased by 9.4% year-on-year to SR1,343.3 million, driven by revenue growth across the Hospital and Pharmacy segments, as well as by the Solutions segment, while gross profit of SR399.9 million decreased by 1% from Q1 2019 and by 3.3% from the previous quarter, due to increased operating costs for the Khobar Hospital, which is in its first operating year and still in ramp-up phase.

First quarter net income grew 5.35% year-on-year and decreased by 8.7% on the previous quarter, to reach SR246.6 million; year-on-year growth was driven by growth in revenues and a focus on operational efficiency and cost containment measures.

The decrease in net income compared to Q4 is a result of revenue seasonality, with Q4 typically representing the best performing quarter in terms of revenue and net income. EBITDA of SR353.3 increased by 10% year-on-year, with an EBITDA margin of 26.3%.

Revenue from the hospital segment exceeded SR1,053 million, increasing by 5.4% year-on-year. Revenues from the pharmacy segment reached SR237 million, a 13.9% increase compared to Q1 2019. As for the Solutions segment, its growth has continued through the significant expansion of operations and services, with first quarter revenues increasing by 152.4% to reach SR53 million compared to the first quarter of 2019.

Dr. Sulaiman Al Habib, chairman of the board of directors at HMG, commented: “The first quarter results are a testament to our continued focus on sustainable growth, with our core Hospital segment continuing to drive top-line performance. During this period, we saw an increase in revenue volume in the Hospital segment, resulting from the ramp-up of our new hospital in Khobar, supported by our continued efforts to grow and diversify our offering, and focus on operational efficiency and cost containment measures.

“Gross profit experienced a slight decrease of 1%, due to the anticipated increase in operating costs at the new Khobar hospital, which remains in its first operating year and at the accelerating revenue growth stage of its lifecycle, where the value of the revenues has not yet reached the level of fixed operating costs.

“The Group works in an integrated manner on sustainable growth and revenue diversification, and its efforts in these areas have resulted in the Pharmacy and Solutions segments gaining ground. Our commitment and leadership in healthcare technology has made us agile in adapting to current market conditions, enabling us to serve many patients at their homes.”

Dr. Al Habib continued: “The Group is well-positioned to provide full support for patients and government authorities during the COVID-19 pandemic, and we remain committed to increasing our capacity and efficiency in order to serve the highest number of patients at all our existing facilities. However, if current conditions continue, it could have an impact on the Group’s performance, cash flow, and financial position in the future.

“We anticipate a negative impact on the financial performance in the second quarter, but the Group and all of its departments are working alongside management to monitor and manage the situation on a real-time basis, in order to rapidly introduce all necessary mitigating actions.”

Dr. Al Habib said: “On behalf of the members of the Group’s Board of Directors and all its employees, I would like to extend my sincere thanks and appreciation for the government’s efforts in addressing and combating the spread of the new coronavirus, as well as to mitigate the negative effects of the pandemic. We thank all health sector workers and medical carers in the Kingdom and pray to Allah to protect the country and the people from all evil and harm.”

Financial and operating highlights: Q1 2020

• Q1 revenue growth of 9.4% year-on-year, reaching SR 1,343.3 million

• Q1 gross profit margin at 29.8% and net profit margin at 18.4%

• Q1 EBITDA of SR353.3 million, EBITDA margin at 26.3%

• Q1 net income grew 5.35% year-on-year, to SR246.6, at a margin of 18.4%

• Number of patients for the first quarter decreased by 1% year-on-year, to 802,353