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Precautionary measures to fight the coronavirus pandemic impacted the Group’s business performance
The spread of the coronavirus pandemic and the challenges inherent in our industry have heavily impacted the Group’s business performance in the first six months of the 2020 financial year. In the second quarter, above all, the requirements by the German government to hold capacity available for an increasing number of infected persons weighed on Group sales and the operating result.
From mid-March to mid-June MEDICLIN’s acute clinics had cancelled all deferrable operations and increased ventilator capacity by 40 %. The post-acute clinics, in turn, kept bed capacity free for coronavirus patients or to ease the burden on the regional hospitals at more than half of the facilities as agreed with the respective Land governments.
MEDICLIN sells the Krankenhaus am Crivitzer See
MEDICLIN and the district of Ludwigslust-Parchim, Mecklenburg-West Pomerania, signed a letter of intent in June 2020 according to which the district will purchase all shares in MediClin Krankenhaus am Crivitzer See GmbH, Crivitz, in the year 2020.
In addition to the free capacities, high personnel expenses have a negative impact on the result
In the first six months of 2020 MEDICLIN achieved Group sales in the amount of EUR 323.5 mill, a decline of EUR 11.9 mill. or 3.5 % on the prior-year period. Consolidated operating profit of EUR -8.8 mill. is report-ed for the 1st half of 2020 (1st half of 2019: EUR 6.1 mill.). Personnel ex-penses alone rose by EUR 8.1 million (+ 3.9%).
Sales in the post-acute segment amounted to EUR 187.9 mill., a decline of EUR 19.4 mill. or 9.3 %. The segment EBIT came out to EUR – 7.5 mill. Sales in the acute segment rose by EUR 8.7 mill., or 7.4 %, to EUR 126.9 mill. The segment EBIT rose from EUR – 1.3 mill. in the previous year’s period to EUR 1.8 mill. in the first six months of the 2020 financial year. Sales in the nursing care business area of EUR 7.8 mill. were EUR 0.2 mill. higher than in the previous year.
Reduced investment in capacity expansion
A total (gross) sum of EUR 15.8 mill. was invested in the first six months of the 2020 financial year (H1 2019: EUR 21.7 mill.). Thereof some EUR 4.0 mill. were spend in new buildings and expansions as well as capacity expansions of hospitals and EUR 3.1 mill. in three newly built nursing care homes.
About EUR 2.7 mill. was spent on medical technology. Another one million Euro was invested in IT infrastructure.
Cash and cash equivalents as of 30 June 2020 amounted to EUR 62.4 mill. (31.12.2019: EUR 37.2 mill.). Cash and cash equivalents as of the balance sheet date include subsidies for a new building of a clinic and expected reimbursements under the protective shield to manage the coronavirus pandemic.
Return to normal expected in the second half of 2020
The development of occupancy rates at the end of the second quarter 2020 show that business in the post-acute clinics is picking up again. However, at present it is impossible to predict whether the usual high average occupancy rate will be reached again in the third quarter of 2020, the third quarter usually being the quarter with the strongest sales and earnings performance. The acute clinics are also gradually decreasing free capacity in favour of postponed treatment and are resuming safe and responsible normal operations while observing the increased hygiene standards.
MEDICLIN presently assumes that the operating business will return to normal in the course of the last six months of the 2020 financial year and that a certain degree of catching up or increased demand for medical and therapeutic services will occur, provided we do not see another supraregional spread of the coronavirus pandemic. At present it is not possible to forecast seriously how fast and to what degree this will occur and what positive economic effects this will have on the Group.
Number of staff increased further
The average number of full-time employees has increased by 160 employees compared to the prior-year six-month period. On average, this means that MEDICLIN employed about 223 more persons than in the comparable prior-year period. All in all, an average of 10,467 employees worked for MEDICLIN in the first half of the 2020 financial year (H1 2019: 10,244).
About MEDICLIN AG (Ticker: MED; WKN: 659 510)
MEDICLIN owns 36 clinics, seven nursing care facilities and nine medical care centres. The Group has about 8,500 beds/places and a headcount of about 10,500. With its strong network, MEDICLIN can offer its patients integrated care from the first visit to the doctor to surgery, post-operative rehabilitation and follow-up care at home. Doctors, therapists and nurses work together closely to achieve the best results. MEDICLIN plans the care of persons in need in accordance with their individual requirements and personal needs.
MEDICLIN – A company of the Asklepios Group.