MD Medical Group Investments Plc: MD Medical Group announces operating results for Q4 2022

 MD MEDICAL GROUP ANNOUNCES OPERATING RESULTS FOR Q4 2022

6 February 2023 – MD Medical Group Investments Plc (“MD Medical Group”, “MDMG”, “Group” or the “Company”; LSE and MOEX: MDMG), a leading Russian private healthcare provider, today announces its operating and unaudited financial results for the fourth quarter of 2022.

Key financial highlights for 12M 2022:

• Total revenue remained flat year-on-year (y-o-y) at RUB 25,222 million.
• Like-for-like (LFL) revenue went down by 1.4% y-o-y.
• Revenue of the Group's regional hospitals grew by 12.1% y-o-y to RUB 6,506 million thanks to the strong operational performance of the medical cluster in Tyumen[1], target utilisation rates achieved at IDK hospital in Samara, as well as the solid results of MD Group Lakhta hospital in St Petersburg.
• Revenue from out-patient clinics in Moscow and the Moscow Region rose by 8.8% y-o-y to RUB 2,630 million as demand for IVF recovered following the pandemic.
• Revenue from out-patient clinics in other regions increased by 2.9% y-o-y to RUB 3,057 million.

Key operational highlights for 12M 2022:

• Total out-patient treatments decreased slightly, by 1.7% y-o-y to 1,826,555, with the average ticket up 13.1% to RUB 5.4 thousand in Moscow and up 6.5% y-o-y to RUB 2.3 thousand in other regions.
• Total in-patient treatments decreased by 3.0% y-o-y to 148,775 due to the easing of the COVID-19 pandemic, with the average ticket up 11.7% to RUB 92.6 thousand in Moscow and down 0.1% y-o-y to RUB 34.6 thousand in other regions.
• Total IVF cycles increased by 2.0% y-o-y to 16,862, with the average ticket increasing by 9.0% to RUB 274.0 thousand in Moscow and by 6.5% y-o-y to RUB 245.2 thousand in other regions.
• Total deliveries increased by 2.1% y-o-y to 8,576, with the average ticket rising by 1.0% y-o-y to RUB 482.8 thousand in Moscow and by 9.8% y-o-y to RUB 181.1 thousand in other regions.

Key financial highlights for Q4 2022:

• Total revenue decreased by 5.1% y-o-y to RUB 6,619 million.
• Revenue of the Group’s hospitals in Moscow declined by 15.8% y-o-y to RUB 3,283 million due to a decrease in COVID-19 diagnostic and treatment services driven by the pandemic slowdown, as well as fewer deliveries in Moscow amid the overall downward trend in Russia’s birth rate.
• Revenue of the Group's regional hospitals grew by 8.1% y-o-y to RUB 1,759 million.
• Revenue from out-patient clinics in Moscow and the Moscow Region rose by 3.5% y-o-y to RUB 707 million.
• Revenue of the Group’s clinics in other regions increased by 13.0% y-o-y to RUB 863 million.

Key operational highlights for Q4 2022:

• Total out-patient treatments decreased by 3.1% y-o-y to 484,446.
• Total in-patient treatments decreased by 6.8% y-o-y to 39,083.
• Total IVF cycles increased by 6.4% y-o-y to 4,426.
• Total deliveries decreased by 3.6% y-o-y to 2,054.

Key events during Q4 2022 and after the reporting period:

• Dividends for H1 2022. On 26 October 2022, the Board of Directors approved the payment of an interim dividend of RUB 642,318,835.50 or RUB 8.55 per ordinary share / GDR for 6M 2022.
• Credit facilities repaid early. In the reporting period, MD Medical Group fully repaid all its existing credit facilities by settling outstanding obligations in the amount of RUB 1,436 million ahead of schedule. The funds had been borrowed to finance the construction of hospitals in Samara, Novosibirsk and Tyumen.
• First clinic launched in Yekaterinburg. On 18 November 2022, MD Medical Group opened an out-patient clinic with a focus on IVF in Yekaterinburg. The clinic can handle up to 400 gynecological surgeries, about 800 IVF cycles and over 30,000 appointments per year. Total investments in the project amounted to circa RUB 74 million.
• Medical centre opened in the Moscow Region. On 13 January 2023, MD Medical Group opened a new out-patient medical centre, Mother & Child Mytishchi, with a capacity of up to 24,000 appointments per year. Total investments in the project stood at around RUB 23 million.

Mark Kurtser, CEO at MDMG, said:

“In 2022, the Group delivered solid operating and financial performance, adapting to the new business environment, with revenue flat year-on-year despite the last year’s strong base.

“We continue to capitalise on our diversification strategy in terms of pricing, service range and geography. In 2022, we strengthened our market position in Moscow and the Moscow Region by opening two new medical centres with a focus on antenatal care in Butovo and Mytishchi. The Group continues to diversify its geographical footprint: during the year, we launched two clinical hospitals in St Petersburg and Tyumen, and also tapped into the Sverdlovsk Region, where we plan to expand our operations going forward.

“During the reporting period, we saw an increase in demand in segments not related to women’s and children’s healthcare, including traumatology, cardiology and oncology. As an example, in just two years after launch, our Lapino-2 surgical unit with a focus on oncology generated as much as RUB 2,182 million in revenue and achieved a 50% utilisation rate while maintaining potential for further growth. Based on expected demand and expertise we have built in oncology, we will continue to expand the Lapino medical cluster in 2023 and are now commencing the construction of a 11,700 sq m Lapino-3 nuclear medical centre, which will support a full cycle of medical care in oncology.

“Throughout the Group's history, we have been focusing on providing high-quality and efficient medical services to our patients while safeguarding the interests of our shareholders. To this end, we have been paying steady dividends. Despite the persistent external headwinds, we distributed more than 50% of our net profit in dividends for H1 2022.

“In conclusion, I would like to thank the entire MD Medical Group team for their contribution to our results and the Group's ability to provide top-notch medical care and deliver stable performance."

Key Highlights for Q4 and 12M 2022