Abu Dhabi, United Arab Emirates, 7May 2024: Burjeel Holdings PLC (“Burjeel” or “the Group”), a leading super-specialty healthcare
services provider in MENA listed on the Abu Dhabi Securities Exchange (“ADX”)
(SYMBOL: BURJEEL; ISIN: AEE01119B224), today announced its
financial results in accordance with International Financial Reporting
Standards (IFRS) for the three-month period ended 31 March 2024.

Progress on Strategic Priorities 

Burjeel Holdings saw continued progress on its
strategic ambitions to ramp up the
Group’s high-growth assets, expand its healthcare infrastructure and drive
patient yields through the provision of highly specialized complex care.

The Group continued to execute on geographic expansion, with the opening of 13 new PhysioTherabia
centers in the Kingdom of Saudi Arabia by May ‘24. This brings the total number
of PhysioTherabia centers to 17 across Riyadh, Madina, Jeddah, Dammam, Al
Khobar and Yanbu, meaning the Group is well on track to reach its target of 60
centers 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 Center
at Burjeel Medical City (“BMC”) in cooperation with the University of Kansas
Medical Center. 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. First-quarter adjusted EBITDA grew by 7.7%,
reflecting ongoing investments in complex care to unlock additional higher
yield inpatient footfall. Adjusted net profit was up by 16.3%, driven by robust
revenue growth, increased operational efficiencies and lower finance costs.

“Expanding the footprint of PhysioTherabia
centers in Saudi Arabia continues to be our key high-potential growth area.
Since inception, we have already rolled out 17 of the 30 centers 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
program. With OncoHelix-CoLab, a first-of-its-kind facility in the UAE, we aim
to revolutionize 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.”

Robust Business Growth Continues

Burjeel Holdings delivered revenue growth of 11.1% to AED 1.2 billion in Q1 ’24, despite
the impact of the longer Ramadan period on elective surgeries and outpatient
visits, which started  on 10 March 2024,
compared to 22 March 2023. 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.

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 utilization 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 Center Al Reem and Burjeel Royal Hospital Al
Ain.

Group EBITDA ex-one-offs grew by 7.7% to AED 260 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 AED 234 million.

Group net profit ex-one-offs & taxes rose by 16.3% to AED 141 million, underpinned
by revenue growth, increased operational efficiencies and lower finance costs.
As previously indicated, the continued ramp-up of Burjeel’s growth assets will
support incremental revenue growth with marginal impact on cost, which is
expected to translate into meaningful bottom-line growth. Including one-off
items and taxes, reported net profit declined by 14.0% to AED 104 million.

Strong Performance Across Core
Business Segments 

Hospitals revenue and EBITDA[3]increased by 13.5% and 18.9%, respectively, in
Q1 ’24, driven by higher inpatient footfall and the Group’s continued focus on
advanced specialty services, including oncology, bone marrow and organ
transplantations, fetal medicine, pediatric sub-specialties and orthopedics.
Hospitals EBITDA margin expanded to 23.6% in Q1 ’24, compared to 22.5% in Q1
’23.

The Medical Centers segment’s performance in Q1 ’24 was impacted by the transformation of
Burjeel Medical Center Al Shahama (“Al Shahama”) into Advanced Day
Surgery Center (the Hospitals segment) in Dec ’23. The Medical Centers segment
including Al Shahama delivered robust revenue growth of 12.5%, totaling AED 120
million in Q1 ’24, on the back of an improved service mix towards high-yield
specialties. Medical Centers EBITDA including Al Shahama grew by 8.1% to AED 33
million despite the impact of the ramp-up of PhysioTherabia centers (losses of
AED 3 million). 

Strong Demand for Super-Specialty
Care Even in Ramadan

Burjeel’s flagship hospital asset, BMC, once again delivered outstanding performance.
Revenue grew 21.8% to AED 283 million in Q1 ’24, while EBITDA3 was up
32.3% to AED 44 million. Notably, BMC’s EBITDA margin increased by 1.2 p.p. to
15.7% in Q1 ’24 despite ongoing investments in physician headcount (+30% YoY).

BMC’s strong growth was driven by a robust increase in inpatient and
outpatient footfall and the introduction and rapid ramp-up of new services.
Total patient footfall grew by 23.5% in Q1’24, with bed occupancy reaching 55%
in Q1’24, compared to 41% in Q1’23.

BMC is a key driver of our wider ambition and of
our ability to deliver increasingly complex care and high-value services. BMC contributed 26% to total Hospitals segment
revenue in Q1 ’24. The segment still has significant utilization headroom,
highlighting its continued potential to contribute to our long-term
value-creation plans.

Maintaining a Robust Balance Sheet

The Group’s net debt / pre-IFRS 16 LTM EBITDA[4]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 optimized 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[5]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 AED 65 million as a final dividend for H2 ’23. Total dividends
for FY ’23, including the AED 95 million interim dividend already paid,
amounted to AED 160 million.

Positive Outlook Maintained

Burjeel Holdings management maintains a positive
outlook for its mid- and long-term
growth thanks to the favorable macro tailwinds in the United Arab Emirates and
the Kingdom of 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 utilization while unlocking strategic expansion
opportunities. The Group continues to invest in deploying technology to provide
a seamless patient journey and drive clinical efficiency.

 

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