Georgia Healthcare Group PLC (“GHG” or the “Group” – LSE: GHG LN), announces the Group’s second quarter and half year 2016 consolidated financial results. Unless otherwise mentioned, comparatives are for the second quarter of 2015. The results are based on International Financial Reporting Standards (“IFRS”) as adopted in the European Union (“EU”), are unaudited and extracted from management accounts.
HIGHLIGHTS
GHG announces today the Group’s 2Q16 and 1H16 consolidated results, reporting a record half year profit of GEL 45.2 million (US$19.3 million/GBP 14.4 million) and earnings per share (“EPS”) of GEL 0.29 (US$ 0.13 per share/GBP 0.09 per share).
GHG – the leading integrated player in the Georgian healthcare ecosystem of GEL 3.4 billion aggregate value
1H16 financial performance
§ Net profit was GEL 45.2 million (US$ 19.3 million / GBP 14.4 million), (up 239.6% y-o-y)
§ Net profit, adjusted was 18.1 million1(US$ 7.7 million / GBP 5.8 million)
§ EPS was GEL 0.29 (US$0.13 / GBP 0.09 per share)
§ EPS, adjusted, was GEL 0.152 (US$0.07 / GBP 0.05 per share)
§ Revenue was GEL 174.2 million (up 55.5% y-o-y)
§ EBITDA was GEL 34.0 million (up 44.2% y-o-y)
§ Return on Average Equity (“ROAE”), adjusted, was 14.2%3
2Q16 financial performance
§ Net profit was GEL 32.2 million (US$ 14.2 million / GBP 10.6 million), (up 371.6% y-o-y, up 176.2% q-o-q)
§ Net profit, adjusted, was GEL 8.1 million (US$ 3.4 million / GBP 2.6 million)
§ EPS was GEL 0.22 (US$0.09 / GBP 0.07 per share)
§ EPS, adjusted, was GEL 0.08 (US$0.03 / GBP 0.02 per share)
§ Revenue was GEL 101.7 million (up 76.9% y-o-y, up 40.1% q-o-q)
§ EBITDA was GEL 16.9 million (up 25.3% y-o-y, down 1.4% q-o-q)
§ Return on Average Equity (“ROAE”), adjusted, was 12.8%
Healthcare services – the largest healthcare services provider in the fast-growing, predominantly privately-owned, Georgian healthcare services market
1H16 financial performance
§ Revenue was GEL 119.2 million (up 34.8% y-o-y)
§ Organic revenue growth was 13.0% y-o-y
§ Gross profit was GEL 53.7 million (up 40.9% y-o-y)
§ EBITDA was GEL 35.0 million (up 56.6% y-o-y)
§ EBITDA margin was 29.3% (up 400 bps y-o-y)
§ Operating leverage was positive at 21.9 percentage points y-o-y
§ Net profit was GEL 47.5 million (up 280.5% y-o-y)
§ Net profit, adjusted, was 20.3 million, (US$ 8.7 million / GBP 6.5 million)
2Q16 financial performance
§ Revenue was GEL 58.8 million (up 28.7% y-o-y, down 2.8% q-o-q)
§ Gross profit was GEL 26.7 million (up 29.4% y-o-y, down 1.4% q-o-q)
§ EBITDA was GEL 17.2 million (up 35.4% y-o-y, down 3.7% q-o-q)
§ EBITDA margin was 29.2% (up 140 bps y-o-y, down 30 bps q-o-q)
§ Operating leverage was positive at 10.8 percentage points y-o-y
§ Net profit was GEL 35.3 million (up 414.6% y-o-y, up 190.8% q-o-q)
§ Net profit, adjusted, was 9.9 million (US$ 4.2 million / GBP 3.2 million)
Pharma business – the third largest pharmaceutical retailer and wholesaler in Georgia
2Q16 and 1H16 financial performance4
§ Revenue was GEL 30.7 million
§ Gross profit was GEL 5.6 million
§ EBITDA was GEL 0.6 million
§ Net loss was GEL 0.4 million
Medical insurance business – the largest medical insurance provider in Georgia
1H16 financial performance
§ Net insurance premiums earned were GEL 29.1 million (up 4.7% y-o-y)
§ Gross profit was GEL 2.3 million (down 49.0% y-o-y)
§ Loss ratio was 85.7% (up 7.1 percentage points y-o-y)
§ Expense ratio was 21.0%5 (up 3.1 percentage points y-o-y)
§ Combined ratio was 106.6% (up 10.0 percentage points y-o-y)
§ EBITDA was negative at GEL 1.5 million
§ Net loss was GEL 1.9 million
2Q16 financial performance
§ Net insurance premiums earned were GEL 15.3 million (up 8.3% y-o-y, up 10.6% q-o-q)
§ Gross profit was GEL 1.3 million (down 44.0% y-o-y, up 33.2% q-o-q)
§ Loss ratio was 85.0% (up 6.9 percentage points y-o-y, down 1.4 percentage points q-o-q)
§ Expense ratio was 21.8% (up 4.5 percentage points y-o-y, up 1.7 percentage points q-o-q)
§ Combined ratio was 106.8% (up 11.4 percentage points y-o-y, up 0.3 percentage points q-o-q)
§ EBITDA was negative at GEL 0.8 million
§ Net loss was GEL 1.7 million
1 Net profit adjusted for one-off non-recurring gain due to deferred tax adjustments (in the amount of GEL 29.3 million for GHG, which fully resulted from the
Group’s healthcare services business) and adjusted for one-off currency translation loss in June (“translation loss”) (in the amount of GEL 2.1 million), which
resulted from settlement of the US Dollar denominated payable for the acquisition of GPC, the Group’s pharma business. For details on the deferred tax
adjustments, see the explanation in the bullet point immediately preceding “Healthcare services business“ on page 5.
2 Earnings per share (EPS) equals Profit for the period attributable to shareholders of the Company adjusted for one-off non-recurring gain due to deferred tax
adjustments and adjusted for one-off translation loss in June divided by weighted average number of shares outstanding during the same period.
3 Profit for the period attributable to shareholders of the Company adjusted for one-off non-recurring gain due to deferred tax adjustments and adjusted for one-off
translation loss in June, divided by average equity attributable to shareholders of the Company for the same period net of unutilised portion of IPO proceeds.
4 Pharma business financials are included since 1st of May 2016, as GHG completed the acquisition of the pharma business in May 2016 and started consolidation
afterwards
5 In prior year GHG financial statements, the Group had offset agents’ commission fees paid for attracting insurance premiums with insurance revenue. Therefore
insurance revenue was presented on a net basis in all prior period accounts. The Group reconsidered the presentation and decided that separate presentation of agents’ commissions aids
