Pihlajalinna Half Year Financial Report 1 January–30 June 2017 (6 months)

Pihlajalinna Plc     Half Year Financial Report     17 August 2017 at 8.00 a.m.

Pihlajalinna Half Year Financial Report 1 January–30 June 2017 (6 months)

Soft second quarter for Private Clinics and Specialised Care, strong profitability in Primary and Social Care

Brief look at April–June:

  •  Revenue amounted to EUR 106.7 (101.4) million – an increase of 5 per cent 
  •  EBITDA amounted to EUR 7.1 (7.0) million 
  •  Adjusted EBITDA amounted to EUR 7.4 (7.0) million – an increase of 6 per cent 
  •  Operating profit (EBIT) amounted to EUR 3.7 (3.5) million 
  •  Adjusted operating profit (EBIT) amounted to EUR 4.0 (3.9) million – an increase of 2 per cent 
  •  Earnings per share (EPS) was EUR 0.10 (0.10) 

Brief look at January–June:

  •  Revenue amounted to EUR 216.7 (201.4) million – an increase of 8 per cent
  •  EBITDA amounted to EUR 16.0 (14.0) million
  •  Adjusted EBITDA amounted to EUR 16.5 (14.0) million – an increase of 18 per cent
  •  Operating profit (EBIT) amounted to EUR 9.1 (7.7) million
  •  Adjusted operating profit (EBIT) amounted to EUR 9.7 (8.1) million – an increase of 20 per cent
  •  Number of personnel at the end of the reporting period was 4,898 (4,589)
  •  Earnings per share (EPS) was EUR 0.25 (0.19)
3 mths
3 mths
6 mths
6 mths
12 mths
Revenue, EUR million 106.7 101.4 216.7 201.4 399.1
EBITDA, EUR million 7.1 7.0 16.0 14.0 27.9
EBITDA, % 6.7 6.9 7.4 7.0 7.0
Adjusted EBITDA, EUR million 7.4 7.0 16.5 14.0 28.9
Adjusted EBITDA, % 6.9 6.9 7.6 7.0 7.2
Operating profit (EBIT), EUR million 3.7 3.5 9.1 7.7 15.1
Operating profit, % 3.5 3.5 4.2 3.8 3.8
Adjusted operating profit (EBIT), EUR million 4.0 3.9 9.7 8.1 16.6
Adjusted operating profit, % 3.7 3.9 4.5 4.0 4.2
Profit before tax (EBT), EUR million 3.3 3.1 8.3 6.9 13.7
Earnings per share (EPS), EUR 0.10 0.10 0.25 0.19 0.39
Equity per share, EUR 4.84 4.66 4.74
Return on capital employed (ROCE), % 10.6 7.1 10.8
Return on equity (ROE), % 11.8 6.8 11.1
Equity ratio, % 44.7 45.4 46.5
Gearing, % 32.4 33.9 21.9
Interest-bearing net debt, EUR million 33.5 33.4 22.1
Net debt/adjusted EBITDA, 12 mths 1.1 1.6 0.8
Gross investments, EUR million* 3.1 10.4 7.8 20.8 27.4
Cash flow from operating activities, EUR million 0.8 -4.6 14.3 9.3 32.3
Cash flow after investments, EUR million -1.4 -11.2 8.0 -7.3 6.8
Average number of personnel (FTE)** 3,812 3,450 3,503
Personnel at the end of the period 4,898 4,589 4,407

* Finance leases are not included in the gross investments
** Pihlajalinna has transitioned to reporting the number of personnel on average as full-time equivalents (FTE) instead of the previous Average number of personnel indicator.

Aarne Aktan, CEO of Pihlajalinna:

Pihlajalinna’s second quarter of 2017 fell slightly short of our expectations. The organic growth of 2.5 per cent in revenue was mediocre, and there was room for improvement in profitability.

The second quarter was a strong one in the Primary and Social Care (P&S) segment. The profitability of Social and Healthcare Outsourcings improved as expected, and the profitability of Other Business Operations was better than expected.

The second quarter was soft in the Private Clinics and Specialised Care (C&S) segment. The profitability of the segment was weakened by Private Clinics, Public Specialised Care as well as Dental Care. The profitability of Occupational Healthcare was gratifying.

In digital services, Pihlajalinna’s remote doctor application has met with a favourable reception. We will continue our investments so that we will be able to launch new digital services and products during the rest of the year.

After the end of the reporting period, we made three acquisitions supporting our strategy. We reinforced our imaging network to improve the care chain of our customers, acquiring the imaging companies Joen Magneetti and Sataman Röntgen in Joensuu and Kuopio, respectively. In Oulu, we acquired Caritas Lääkärit Oy to strengthen the start of our future new private clinic in the city. The acquisition supports our expansion in terms of both personnel and customer accounts.

In May, the municipal councils of Forssa, Humppila and Ypäjä voted in favour of establishing a joint venture with Pihlajalinna to provide social and healthcare services for the region. The decisions have been appealed to the Market Court. The municipal boards of Forssa and Humppila have proposed in August to the municipal councils to revoke the procurement decision and to suspend the procurement procedure. The procurement decision made by the municipality of Hattula on its social and healthcare services was repealed by the Market Court in June, so the previously announced agreement will not be implemented. In Tervola, where we had already been chosen as a service provider, we unfortunately did not reach an agreement with the municipality on the production of social and healthcare services and their costs.

We do not consider the postponement of the health, social services and regional government reform by one year to be a major issue in the scale of the reform as a whole. We firmly believe that the health, social services and regional government reform will be realised during this government term. The postponement, on the other hand, may refresh the municipal outsourcing market.

Pihlajalinna’s outlook for 2017 unchanged

Pihlajalinna’s revenue is expected to grow and adjusted operating profit (EBIT) to improve compared to 2016. In the financial year 2016, revenue was EUR 399.1 million and the adjusted operating profit (EBIT) was EUR 16.6 million.

Financial reporting in 2017

Interim report January–September: Thursday 9 November 2017


Pihlajalinna Plc will hold a briefing for analysts and the media on Thursday 17 August 2017 at 10:00 a.m. in the Paavo Nurmi room at Hotel Kämp, Pohjoisesplanadi 29, 00100 Helsinki, Finland.

Helsinki, 16 August 2017

Pihlajalinna Plc’s Board of Directors

Further information:
Aarne Aktan, CEO, +358 40 342 4440
Tarja Rantala, interim CFO, +358 40 774 9290
Siri Markula, Head of Communications and IR, +358 40 743 2177, siri.markula@pihlajalinna.fi

Nasdaq Helsinki
Major media

Pihlajalinna in brief
Pihlajalinna is one of the leading private social and healthcare services providers in Finland. The Company provides social and healthcare services for households, companies, insurance companies and public sector entities in private clinics, health centres, dental clinics and hospitals around Finland. Pihlajalinna provides general practitioner and specialised care services, including emergency and on-call services, a wide range of surgical services, occupational healthcare and dental care services, in private clinics and hospitals operating under the Dextra brand. Under the Pihlajalinna brand the Company, in cooperation with the public sector, offers social and healthcare service provision models to public sector entities with the aim of providing high quality services for public pay healthcare customers.