Burjeel Holdings Group net profit ex-one-offs & taxes rose by 16.3% to AED141 million ($38.4 million) in the first quarter (Q1) underpinned by revenue growth, increased operational efficiencies and lower finance costs.
First-quarter adjusted EBITDA grew by 7.7%, reflecting ongoing investments in complex care to unlock additional higher yield inpatient footfall.
Burjeel Holdings delivered revenue growth of 11.1% to AED1.2 billion in Q1 ’24, despite the impact of the longer Ramadan period on elective surgeries and outpatient visits. Group revenue growth in the pre-Ramadan period accelerated compared to Q4 ‘23 performance and was in line with FY ‘24 guidance, driven by strong patient footfall growth and improvement in patient yield.
Hospitals segment
The hospitals segment continued to be the core driver of the group’s performance, delivering 90% of total revenue in Q1 ’24, including robust top-line growth at the group’s flagship hospital, BMC, and other high-growth assets.
Group bed occupancy rose to 64% in Q1 ’24, meaning Burjeel still has room within the invested infrastructure to grow organically without any further investment.
The group achieved robust inpatient footfall growth of 11.0% in Q1 ‘24. Inpatient volume in the pre-Ramadan period accounted for 88% of total incremental growth for Q1 ‘24, supported by the continued ramp-up of growth assets and strong demand for super-specialty services.
Growth in inpatient footfall was further driven by BMC, Burjeel Hospital Abu Dhabi, Medeor Hospital Dubai and Burjeel Royal Hospital Al Ain.
Group outpatient footfall and utilisation rate in Q1 ’24 were substantially impacted by the postponement of visits falling during Ramadan until after Eid. As a result, outpatient volume increased only marginally by 1.6%. Outpatient volume growth accelerated in the pre-Ramadan period compared to Q4 ’23 due to the introduction and rapid ramp-up of new services and effective cross-group referral capabilities. Growth in outpatient footfall was further driven by BMC, LLH Salalah, Burjeel Day Surgery Centre Al Reem and Burjeel Royal Hospital Al Ain.
Group EBITDA
Group EBITDA ex-one-offs grew by 7.7% to AED260 million in Q1 ’24 despite the Ramadan impact and ongoing investments in complex care. Including one-off items like movement in the fair value of investments in tradable financial securities and performance-based employee bonuses for the strong financial results achieved in FY ’23 (paid in Q1 ’24), reported EBITDA decreased by 2.9% to AED234 million.
The group continued to execute on geographic expansion, with the opening of 13 new PhysioTherabia centres in the Kingdom of Saudi Arabia by May ‘24. This brings the total number of PhysioTherabia centres to 17 across Riyadh, Madina, Jeddah, Dammam, Al Khobar and Yanbu, meaning the Group is well on track to reach its target of 60 centres by the end of 2025. It also expanded insurance partnerships with leading providers in the KSA like Tawuniya and Al Arabia Takaful.
Burjeel’s super-specialty medicine practice passed important strategic milestones with the launch of the Thyroid Parathyroid Centre at Burjeel Medical City (“BMC”) in cooperation with the University of Kansas Medical Centre. BMC successfully performed its first two liver transplants during Ramadan. Finally, Burjeel launched OncoHelix-CoLab in May ’24, expanding its omics and precision medicine capabilities with the first lab in the UAE to offer comprehensive capabilities in molecular and cellular immunology as well as transplant diagnostics.
John Sunil, Chief Executive Officer of Burjeel Holdings, said: “Building on our impressive performance in 2023, Burjeel Holdings delivered another quarter of double-digit revenue growth despite the impact of an earlier start to Ramadan this March. At the same time, outstanding performance across our core business segments drove accelerated revenue and patient footfall results in the pre-Ramadan period, which aligns with our full-year 2024 guidance.
PhysioTherabia centres
“Expanding the footprint of PhysioTherabia centres in Saudi Arabia continues to be our key high-potential growth area. Since inception, we have already rolled out 17 of the 30 centres due to be operational this year, putting us well ahead of schedule. Moreover, PhysioTherabia has gained access to a broader clientele through strategic partnerships with leading insurance providers, accelerating the kingdom's penetration and solidifying its position as a key player in the sector.
“Burjeel Holdings has also passed further important milestones towards the strategic goal of cementing our position as a leading hub for complex and advanced care. BMC recently completed its first two liver transplants, marking a significant leap in our multi-organ transplant programme. With OncoHelix-CoLab, a first-of-its-kind facility in the UAE, we aim to revolutionise the diagnostic landscape and strengthen the healthcare ecosystem in the region.
“Based on our robust first-quarter performance, especially in the pre-Ramadan period, and supported by strong macro tailwinds, we reiterate our 2024 guidance of delivering mid-teens revenue growth and improving EBITDA margin. On top of that, we continue to evaluate various CAPEX-light opportunities in the Gulf, where we anticipate introducing new value-based products in KSA and additional advanced healthcare service lines in the UAE.”
Maintaining a Robust Balance Sheet
The group's net debt / pre-IFRS 16 LTM EBITDA remained at 1.1x as of 31 March 2024. The strength of the group’s balance sheet provides adequate financial flexibility to pursue growth opportunities going forward. It is the Group’s intention for debt maturing in 2024 and 2025 to be partially paid down and optimised to reduce financing costs and extend tenures, using a variety of available instruments.
Cash flow from operating activities remained almost stable despite the substantial impact from Ramadan and other one-offs on EBITDA growth, as well as changes in working capital in Q1 '24. FCF cash conversion improved to 40%, with an 18% ROCE in Q1 '24.
Dividends
Burjeel is committed to delivering value to its stakeholders and has an asset-light cash-generative model that underpins significant dividend-paying capacity. The group’s dividend policy envisages payment of cash dividends from 2024 onwards, with an expected payout ratio of 40% to 70% of net profit, depending on investments required for additional growth plans. In May 2024, the group paid out AED65 million as a final dividend for H2 ’23. Total dividends for FY ’23, including the AED95 million interim dividend already paid, amounted to AED160 million.
Positive Outlook Maintained
Burjeel Holdings management maintains a positive outlook for its mid- and long-term growth thanks to the favourable macro tailwinds in the UAE and Saudi Arabia, with strong predicted mid-term GDP growth, rapid population growth and increasing demand for added healthcare capacity. The regional aspiration to expand the non-oil-based economy will boost demand with limited supply in a regulated environment, driving the group's performance.
Burjeel Holdings continues to see strong demand for its differentiated specialty healthcare offering. With state-of-the-art infrastructure consisting of several high-growth assets and an expansive referral network, Burjeel remains in a solid position to deliver on its value-creation strategy of increasing patient yield and utilisation while unlocking strategic expansion opportunities. The group continues to invest in deploying technology to provide a seamless patient journey and drive clinical efficiency.--TradeArabia News Service
