Pihlajalinna Plc Half Year Financial Report 1 January-30 June 2016 (6 months)

Pihlajalinna Plc     Half Year Financial Report     17 August 2016 at 8.00 a.m.

Pihlajalinna Half Year Financial Report 1 January-30 June 2016 (6 months)

Consolidated revenue grew and profitability continued to improve

Brief look at April-June:

  • Revenues amounted to EUR 101.4 (51.9) million - an increase of 95 per cent
  • Operating profit (EBIT) amounted to EUR 3.5 (0.1) million and adjusted operating profit (EBIT) to EUR 3.9 (1.0) million
  • EBITDA amounted to EUR 7.0 (2.1) million
  • Earnings per share was EUR 0.06 (-0.05)

Brief look at January-June:

  • Revenues amounted to EUR 201.4 (99.8) million - an increase of 102 per cent
  • Operating profit (EBIT) amounted to EUR 7.7 (1.3) million and adjusted operating profit (EBIT) to EUR 8.1 (2.3) million
  • EBITDA amounted to EUR 14.0 (5.1) million
  • Number of personnel at the end of the reporting period was 4,589 (2,525)
  • Earnings per share was EUR 0.16 (-0.02)

Mänttä-Vilppula approved the social and healthcare service agreement (1 August 2016-31 July 2026) with Pihlajalinna including the five-year option period (1 August 2026-31 July 2031)

KEY FIGURES AND RATIOS 4-6/2016
3 mths
4-6/2015
3 mths
1-6/2016
6 mths
1-6/2015
6 mths
2015
12 mths
INCOME STATEMENT          
Revenue, EUR million 101.4 51.9 201.4 99.8 213.3
Adjusted EBITDA, EUR million 7.0 3.0 14.0 6.1 12.5
Adjusted EBITDA, % 6.9 5.8 7.0 6.1 5.9
EBITDA, EUR million 7.0 2.1 14.0 5.1 11.6
EBITDA, % 6.9 4.0 7.0 5.1 5.4
Adjusted operating profit (EBIT), EUR million 3.9 1.0 8.1 2.3 4.5
Adjusted operating profit, % 3.9 1.9 4.0 2.3 2.1
Operating profit (EBIT), EUR million 3.5 0.1 7.7 1.3 3.6
Operating profit, % 3.5 0.1 3.8 1.3 1.7
Profit before tax (EBT), EUR million 3.1 -0.7 6.9 -0.1 1.3
           
SHARE RELATED INFORMATION          
Earnings per share (EPS), EUR 0.06 -0.05 0.16 -0.02 0.03
Equity per share, EUR     4.63 3.46 4.47
           
OTHER INFORMATION          
Return on capital employed (ROCE), %     7.2 3.6 3.4
Return on equity (ROE), %     6.1 1.2 2.3
Equity ratio, %     45.1 39.8 50.5
Gearing, %     34.2 36.6 25.2
Interest bearing net debt, EUR million     33.4 24.5 23.5
Net debt/adjusted EBITDA, 12 mths     1.6 1.8 1.9
Gross investments, EUR million 10.4 1.8 20.8 15.9 44.6
Cash flow from operating activities, EUR million -4.6 2.6 9.3 9.5 17.7
Cash flow after investments, EUR million -11.2 -1.8 -7.3 1.0 -14.4
Average number of personnel     4,313 2,247 2,503
Personnel at the end of the period     4,589 2,525 3,047

Aarne Aktan, new CEO of Pihlajalinna:

We are pleased to report that strong growth in Pihlajalinna Group's revenue and operating profit continued during the second quarter. 74 per cent of the growth in revenue was organic. This was mainly attributable to the social and healthcare outsourcing contracts in Kuusiokunnat and Jämsä. Two major acquisitions, namely Koskiklinikka in the Tampere Region and ITE in Eastern Finland, contributed significantly to the operating profit.

A temporary act restricting municipalities' complete social and healthcare outsourcings entered into force on 1 July 2016. The contents of this act were as anticipated, and we do not expect it to have a major effect on our business in the short term. At the end of June, the Finnish Government published preliminary draft bills on the health and social services reform. The Government draft proposal will be completed and sent for official comments in August. It is too early to evaluate its effects on Pihlajalinna's business operations. In this reform, it is particularly important to ensure that true freedom of choice is put into practice, also in specialised care.  Otherwise, we believe that the targeted cost savings from the health and social services reform for the society will not materialise.

Both of Pihlajalinna Group's operating segments developed well during the second quarter. In particular, we are pleased with our revenue development. The Private Clinics and Specialised Care segment delivered a reasonable profit. A significant part of the performance improvement was attributable to the aforementioned acquisitions. The Primary and Social Care segment's profitability has improved according to plans. Profitability improvement requires changes in ways of working, which is why it takes time to reach the aimed profitability level.

I am very excited about my new position as CEO of Pihlajalinna Group. It is great to be able to develop its operations. The company's founder, Mikko Wirén, who transferred to the position of Chairman of the Board of Directors, will focus on growing the company's business. Pihlajalinna has grown larger and its operating environment has changed, requiring us to further sharpen our strategic focus. We will also revise our operations to better meet customer needs. This reform and an increase in company recognition will be our key focus areas, now that we are preparing for future freedom of choice in social and health care.

Pihlajalinna's outlook for 2016 unchanged

Pihlajalinna's consolidated revenue is expected to exceed EUR 400 million in 2016 and the adjusted EBIT margin is expected to improve compared to 2015.

In the financial year 2015, the adjusted EBIT margin was 2.1 per cent.

Financial reporting in 2016

Pihlajalinna will publish an interim report for January-September 2016 on Friday 11 November 2016.

Briefing

Pihlajalinna Plc will hold a briefing for analysts and the media on Wednesday 17 August 2016 at 9.30 a.m. in the Paavo Nurmi room at Hotel Kämp, Pohjoisesplanadi 29, 00100 Helsinki, Finland.

Helsinki, 17 August 2016

Pihlajalinna Plc's Board of Directors

Further information

Aarne Aktan, CEO, tel. +358 40 342 4440
Niclas Köhler, CFO, tel. +358 40 342 4420

Distribution

Nasdaq Helsinki
Major media
investors.pihlajalinna.fi

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.

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