TIDMNMC
RNS Number : 2953A
NMC Health Plc
28 May 2019
28 May 2019
Closing of KSA Joint Venture transaction and 2019 earnings
guidance update
Formation of NMC KSA Joint Venture completed with higher stake
in Care
Further to the announcement made on 5 March 2019, NMC Healthcare
("NMC"), The General Organization for Social Insurance ("GOSI") and
its investment arm Hassana Investment Company ("Hassana") are
pleased to announce the closing of the definitive agreements signed
on 4 March 2019 in relation to the formation of the joint venture
("NMC KSA") in the healthcare sector of the Kingdom of Saudi Arabia
("KSA").
NMC KSA is formed by GOSI's contribution of its 38.88% stake in
Tadawul-listed National Medical Care Company ("CARE") at a price of
SAR 54 per share and NMC's contribution of its five assets in KSA
and an additional USD 66mn cash injection at closing. The cash
injection has been utilized by the JV to acquire an additional
10.3% stake in CARE through privately negotiated deals at a
weighted average price of SAR 52.6 per share. In total, NMC KSA now
owns a 49.2% stake in CARE.
Following the closing of the transaction, NMC Healthcare owns
53% stake in NMC KSA, while GOSI owns the remaining 47%. NMC will
control operations and the board of the joint venture entity.
For NMC, Moelis & Company and EFG Hermes acted as financial
advisors and Shearman & Sterling LLP acted as legal
advisor.
Upgrading underlying guidance
Given NMC's majority stake in NMC KSA, along with management
control of the company, financial statements of NMC KSA will be
fully consolidated. In turn, NMC KSA will recognize income from
CARE as share of profit from an associate.
The underlying guidance for 2019 has been upgraded to reflect
the impact of the JV, as well as consolidation of Boston IVF.
2019 revenues guidance: USD 2,500-2,540m (previous guidance: USD
2,425-2,465m)
2019 EBITDA guidance: USD 575-585m (previous guidance: USD
566-576m)
2019 share of profits from associate guidance: USD 7m
2019 net income to equity holders guidance: USD 320-330m
Adding the impact of IFRS 16
Management has refined the anticipated impact of IFRS 16
compared to the original guidance provided in the 2018 Capital
Markets Day in October last year. Additionally, the impact of
Boston IVF has been incorporated, which will add c. USD 25mn to
lease liabilities.
Revised guidance including the impact of IFRS 16 is as
follows:
2019 revenues guidance: USD 2,500-2,540m
2019 EBITDA guidance: USD 665-675m
2019 net income to equity holders guidance: USD 297-305m
2019 Lease liabilities guidance: USD 680-690m (including USD 25m
associated with Boston IVF)
Prasanth Manghat, Chief Executive Officer of NMC Health,
commented;
"We are pleased to announce the fruition of our partnership with
GOSI and its investment arm, Hassana Investment Company, in the
form of one of the largest healthcare operators in Saudi Arabia
today. I personally view this joint venture as one of the top
landmark events in the history of NMC since its inception. We have
a clear vision for transforming NMC KSA into one of the most
dominant players in the country. We will rapidly implement our
strategic plan, bringing higher value services in the country, such
as IVF, cosmetics and leveraging our association with Boston and
Cincinnati Children Hospitals to strengthen paediatrics in KSA.
I am also pleased to share that our underlying guidance for 2019
has been revised upwards, with our revenue projections for the year
increasing by about 3% and EBITDA forecast increase by about 2%,
compared to our earlier guidance. The current year will also
witness contribution by National Medical Care to our income. With
an increased stake of 49.2% in Care by NMC KSA, we see many
opportunities of leveraging growth by bringing its operational
metrics in line with other healthcare operators in the Kingdom. We
thus continue to view the future, both in the UAE and in KSA, with
considerable optimism."
Contacts
NMC
Prasanth Manghat, Chief Executive
Officer
Prashanth Shenoy, Chief Financial +971 (0)50 522 5648
Officer +971 (0)56 329 0545
Asjad Yahya, Investor Relations +971 (0)56 219 0975
Media
FTI Consulting, London
Brett Pollard / Victoria Foster Mitchell +44 (0)20 3727 1000
FTI Consulting, Gulf
Shane Dolan +971 (0)4 437 2100
About NMC Health
NMC the leading private healthcare operator in the GCC with an
international network of hospitals across 19 countries. NMC also
ranks as one of the top three in-vitro fertilisation ("IVF")
operators globally. The Group is also a leading provider of
long-term medical care in the UAE through its subsidiary ProVita.
Pursing an aggressive international expansion program from 2016,
NMC has identified the Kingdom of Saudi Arabia (KSA) in particular
as a key growth market, where the company has introduced long-term
and multi-specialty care services. NMC received over 8.5m patients
in 2018. The Group is also a leading UAE supplier of products and
consumables across several key market segments, with the major
contribution coming from healthcare related products. The Group
reported revenues of US$2.0 billion for the year ended 31 December
2018.
In April 2012 NMC was listed on the Premium Segment of the
London Stock Exchange. NMC is a constituent of the FTSE 100
Index.
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END
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