Pihlajalinna is temporarily withdrawing its outlook for 2020, and the impact of the coronavirus epidemic on Pihlajalinna’s business operations will be reassessed in the coming months
Pihlajalinna Plc Inside information 27 March 2020 at 11:20 AM
Pihlajalinna is temporarily withdrawing its outlook for 2020, and the impact of the coronavirus epidemic on Pihlajalinna’s business operations will be reassessed in the coming months
Because of the coronavirus epidemic, Pihlajalinna is temporarily withdrawing its outlook for 2020 which was given on 14 February 2020. As the situation changes daily, it is hard to assess and predict the financial impact caused by the emergency laws issued by the Finnish government and the duration of the coronavirus epidemic on Pihlajalinna’s business operations. Pihlajalinna estimates that it will issue an updated outlook for 2020 later this year. During the first months of the year, Pihlajalinna’s turnover and profitability have developed in the expected manner.
The impact of the coronavirus epidemic on Pihlajalinna’s business operations
Pihlajalinna’s comprehensive outsourcing in the context of the social welfare and healthcare reform and other fixed-price invoicing is related to a steady recognition of income over time. In periods of low demand, the profitability of these kinds of contracts will usually remain stable. The coronavirus epidemic is not expected to have a significant effect on the demand for housing services for the elderly or recruitment services. For the above-mentioned reasons, based on the current situation, it is expected that more than half of Pihlajalinna’s business operations will remain stable despite the coronavirus epidemic.
Pihlajalinna temporarily closed all of its fitness centres on 20 March 2020 to prevent the spreading of the coronavirus epidemic. The epidemic has also decreased the demand for non-urgent healthcare and oral health services. Adjustment measures have already been initiated for the sports centres and oral health services. On the other hand, demand for remote services has increased manifold compared to the beginning of the year.
It is difficult to comprehensively assess the financial impact of the coronavirus epidemic because the pent-up demand for social services and healthcare as well as non-urgent care in wellness services is expected to increase once the situation goes back to normal. At the moment, it is difficult to assess the volume of services and workforce that the public sector will acquire from private companies.
Long-term financial objectives remain the same
The trends and megatrends that accelerate the growth of Pihlajalinna’s business operations have not changed because of the coronavirus epidemic. The use of digital services and the structural changes in the production of social services and healthcare may even increase because of the coronavirus epidemic. Pihlajalinna’s long-term objectives — net debt less than 3 times the operating profit and profit over 7 per cent of the turnover — remain the same.
Previous outlook for 2020 (issued on 14 February 2020)
Turnover for 2020 is expected to grow from 2019. Earnings before interest and tax (EBIT) is expected to grow from 2019.
Further information
Joni Aaltonen, Group CEO, tel. +358 40 524 7270
Tarja Rantala, Chief Financial Officer, tel. +358 45 774 9290
Distribution
Nasdaq Helsinki
Principal news media
investors.pihlajalinna-konserni.fi
Pihlajalinna in brief
Pihlajalinna is one of the leading private social and healthcare services providers in Finland. The company serves private individuals, businesses, insurance companies and public sector entities, such as municipalities and joint municipal authorities. Pihlajalinna provides general practitioner services, specialised care, emergency and on-call services, a wide range of surgical services, occupational healthcare, dental care and wellbeing services. In addition, the company offers innovative social and healthcare service provision models to public sector entities.