Al Noor Hospitals’s first-half profit slips despite rise in patient numbers

Six month profits at Abu Dhabi-based Al Noor Hospitals Group slipped slightly on higher depreciation costs, even as as its revenues rose by 8.5 per cent year on year.

Al Noor said it was expecting to achieve 'slightly higher growth in revenue and earnings' during the second half of the year. Fatima Al Marzooqi / The National

Al Noor Hospitals Group’s first-half earnings dipped on higher depreciation costs despite an increase in revenue.

The Abu Dhabi-based company posted an 8.5 per cent rise in revenue to US$244 million from $224.8m for the same period last year. That was thanks to a 13 per cent rise in outpatient volumes and a 7 per cent increase in inpatient numbers.

The London-listed group also highlighted the increasing revenue contribution from its Al Madar Medical Centre network subsidiary, acquired in 2013.

But underlying net profit slid to $44.9m from $45.4m last year because of what Al Noor said were “higher depreciation costs arising from our focused plan of investment in growth initiatives”.

Nevertheless, Al Noor announced an interim dividend of 4.1 pence a share, up from 3.7 pence last year.

Al Noor said it was expecting to achieve “slightly higher growth in revenue and earnings” during the second half of the year, although margins would be hit for the rest of the year by the opening of new outpatient medical centres in Sharjah and Al Ain, and the continuing refurbishment of its hospital on Khalifa Street in Abu Dhabi.

“Trading in the second half of the year has started in line with our expectations, and we expect to deliver additional growth in earnings from our recent investments in infrastructure and equipment in our hospitals and higher patient volumes at our newest medical centres,” said Ronald Lavater, Al Noor’s chief executive.

He said that falling oil prices were unlikely to affect Al Noor’s core business, as governments in the UAE and the region continued to encourage the growth of the private healthcare sector. “We continue to see a growth in the [UAE] population and we don’t think that’s going to change,” said Mr Lavater.

Al Noor’s shares closed up 2.51 per cent at £8.57 yesterday.

Follow The National's Business section on Twitter