GHG 1Q17 Results

Georgia Healthcare Group PLC (“GHG” or the “Group” – LSE: GHG LN), announces the Group’s first quarter 2017 consolidated financial results. Unless otherwise mentioned, comparatives are for the first quarter of 2016. The results are based on International Financial Reporting Standards (“IFRS”) as adopted in the European Union (“EU”), are unaudited and extracted from management accounts.




GHG announces today the Group’s 1Q17 consolidated results, reporting a profit of GEL 13.0 million (US$5.3 million/GBP 4.3 million) and earnings per share (“EPS”) of GEL 0.07 (US$0.03 per share/GBP 0.02 per share).


GHG the leading integrated player in the Georgian healthcare ecosystem of GEL 3.4 billion aggregate value

§  Net profit was GEL 13.0 million (US$5.3 million / GBP 4.3 million), (up 8.4% y-o-y, up 11.9% q-o-q on a normalised basis1)

§  EPS was GEL 0.07 (US$0.03 / GBP 0.02 per share)

§  Revenue was GEL 186.6 million (up 157.1% y-o-y, up 37.2% q-o-q)

§  EBITDA was GEL 25.1 million (up 46.3% y-o-y, up 3.2% q-o-q)

§  ROAE, normalised, was 11.2%2



Healthcare services – the largest healthcare services provider in the fast-growing, predominantly privately-owned, Georgian healthcare services market

§  Revenue was GEL 66.5 million (up 10.1% y-o-y, which was fully organic; down 1.6% q-o-q)

§  Gross profit was GEL 27.9 million (up 3.3% y-o-y, down 12.7% q-o-q)

§ EBITDA was GEL 16.8 million (down 5.7% y-o-y, down 21.9% q-o-q)

§  EBITDA margin was 25.3% (down 420 bps y-o-y, down 660 bps q-o-q)

§  Our 1Q17 EBITDA and EBITDA margin were impacted and temporarily reduced by the negative operating leverage of the healthcare facilities and services that are in the roll-out phase as well as an increase in tariffs of utilities (mainly on gas and electricity) effective from the fourth quarter of 2016. The effect of the roll-outs on the healthcare services EBITDA margin was three percentage points, while the cost of utilities effect, together with the seasonality, was two percentage points. We expect the EBITDA margin to recover gradually to our targeted level, of c.30% by 2018.

§  Net profit was GEL 7.2 million (down 41.0% y-o-y, down 40.1% q-o-q on a normalised basis1)


Pharma business – the largest pharmaceutical retailer and wholesaler in Georgia

§  The consolidation of Pharmadepot results started from January 2017

§  Revenue was GEL 111.4 million (up 96.9% q-o-q)

§  Retail revenue from GPC3 was GEL 40.4 million (up 3.2% q-o-q)

§  Gross profit was GEL 27.0 million (up 123.3% q-o-q)

§  Gross margin was 24.2% (up 280 bps q-o-q)

§  EBITDA was GEL 8.7 million (up 155.9% q-o-q)

§  EBITDA margin was 7.8% (up 180 bps q-o-q)

§  Net profit was GEL 7.0 million (up 307.8% q-o-q)


Medical insurance business – the largest medical insurance provider in Georgia

§  Net insurance premiums earned were GEL 14.0 million (up 1.0% y-o-y, down 14.4% q-o-q)

§  Gross profit was GEL 1.2 million (up 25.2% y-o-y, down 6.4% q-o-q)

§  Loss ratio was 84.6% (down 180 bps y-o-y, down 70 bps q-o-q)

§  Expense ratio was 20.2% (up 10 bps y-o-y, up 20 bps q-o-q)

§  Combined ratio was 104.8% (down 170 bps y-o-y, down 50 bps q-o-q)

§  EBITDA was negative GEL 0.4 million

§  Net loss was GEL 1.1 million


1 In 4Q16 the net profit was normalised and adjusted for one-off non-recurring loss due to the deferred tax adjustment (in the amount of GEL 5.3 million for GHG which resulted from the Group’s healthcare services – GEL 4.3 million, medical insurance business – GEL 0.8 million and pharma business – GEL 0.2 million).

2 Normalised ROAE is calculated as net profit for the period attributable to shareholders, divided by average equity attributable to shareholders for the same period net of unutilised portion of IPO proceeds.

3 We disclose retail revenue only, as the wholesale revenue is distorted by intercompany sales and will not be comparative to prior periods.