20 Aug 2018 07:00
NMC Health Plc
HALF-YEARLY FINANCIAL REPORT: Six months ended 30 June 2018
Profitable expansion driven by organic growth and integration activities
London, 20 August 2018: NMC Health plc ("NMC", the "Company" or the "Group"), the leading private healthcare operator in the Gulf Cooperation Council (GCC) with international services across 15 countries, announces its results for the six months ended 30 June 2018 ("H1 2018").
Financial summary
US$m (unless stated) | H1 2018 | H1 2017 | YoY Growth |
Revenue | 932.0 | 775.2 | 20.2% |
EBITDA | 225.5 | 170.7 | 32.1% |
EBITDA margin | 24.2% | 22.0% | 220bps |
Net Profit | 116.7 | 97.8 | 19.3% |
Earnings per share (US$)-Basic | 0.561 | 0.429 | 30.8% |
Adjusted Profit | 141.4 | 115.8 | 22.1% |
Adjusted Earnings Per Share(US$) | 0.669 | 0.514 | 30.2% |
Notes:
· Adjusted Profit is same as shown in Note 9
· Adjusted Earnings per share equals Diluted adjusted earnings per share as shown in Note 9
· EBITDA equals Profit from operations before depreciation, amortization, transaction cost and impairment as shown in the Condensed Consolidated Income statement. This is the definition of EBITDA which is used throughout the document
· Weighted average shares outstanding in H1 2018 stood at 211.1m shares compared to 205.8m shares in H1 2017. The increase resulted from the issuance of 3.5m shares for partial payment of outstanding minorities in Fakih IVF and exercise of share options
H1 2018 Group financial highlights
· Group reported revenues increased by 20.2% YoY to US$932.0m, with organic growth accounting for 13.4% of this growth
· EBITDA margin increased by 220bps to 24.2% as EBITDA growth (+32.1% to US$225.5m) continues to outpace revenue growth
· Financial and operational performance during H1 2018 remained in line with expectations, with management maintaining positive outlook for H2 2018
Healthcare DIVISION remains the primary growth
· Healthcare continues to be the primary driver of growth with revenues up by 25.8% to $706.0m and Healthcare EBITDA up 34.0% to $226.8m
o Healthcare division accounted for 73% of Group revenues and 88% of Group EBITDA in H1 2018
o Healthcare EBITDA margin improved 190bps YoY to 32.1%
o Healthcare division's patients increased YoY by 19.7% to 3.4m.
o Hospital bed occupancy rates reached 69.9%, an increase of 80bps
o Operational beds increased from 1,129 beds to 1,530 beds, an increase of 35.5%
· Principal growth drivers in the period were:
o Realization of revenue and EBITDA benefits from management's ongoing initiatives to improve asset utilisation, introduction of other group healthcare services into our legacy hospital facilities and efficiency projects across the healthcare businesses
o Continuing ramp-up of NMC Royal Hospital; operational beds at the facility reached 225 in the period
o Continuing benefit from the previous introduction of mandatory health insurance in Dubai
o Increased growth in Sharjah primarily in Al Zahra Hospital
o Acquisition of CosmeSurge, the only institutionalized cosmetics business in the GCC, as well as the acquisition of outstanding minorities across several subsidies, particularly Fakih IVF
· As a result of the persistent increase in complexity of services offered at NMC's facilities, the Company's healthcare verticals continue to record a steady increase in revenue per patient.
o Revenue per patient for the Multi-Speciality vertical increased 8% YoY to US$146.2, while the Maternity & Fertility vertical witnessed a 14% YoY increase to US$1,072.6
o The Long-term & Home Care vertical recorded a 5% YoY increase in revenue per patient to US$19,957. Excluding the impact of the new assets contributing to the vertical in H1 2018, revenue per patient stood at US$20,788, up 9.6% YoY
· Distribution division revenue increased 8.4% to $255.0m, alongside an improved EBITDA margin of 11.9%
H1 2018 Strategic initiatives
· NMC reached an agreement with GOSI/Hassana Investment Company to form a new joint venture, which is expected to substantially boost the Group's growth prospects in KSA. Once complete, the JV is expected to rank as the second largest healthcare operator in the Kingdom in terms of number of beds, positioning it ideally to capitalize on the underserved Saudi healthcare market
· The Group entered the attractive cosmetics market through the acquisition of a 70% stake in CosmeSurge. A rapid expansion of CosmeSurge's clinics alongside NMC's existing healthcare network is anticipated to substantially boost growth and margin profile at the acquired entity.
o Financials for CosmeSurge were consolidated for 3 months in H1 2018
· NMC completed the acquisition of Chronic Care Specialist Medical Centre (CCSMC), representing one of the Group's most significant investments in the Long Term & Home Care vertical in Saudi Arabia.
o Financials for CCSMC were consolidated for only months in H1 2018
· NMC entered into a landmark Operations & Management (O&M) agreement with the Abu Dhabi National Oil Company (Adnoc) to manage its healthcare facilities, including its flagship hospital in Ruwais.
strong balance sheet to continue to support growth
· Issuance of a $450m convertible bond in April 2018 has added a new source of funding for NMC. The convertible bond represents the first step in realigning of the Group's balance sheet, in line with its status as a member of the large cap FTSE-100 index.
· Receivables days outstanding remained in line with management's expectations, increasing slightly to 107 versus 100 as at 31 December 2017. The increase was mainly due to slower receivables collection for the Distribution business due to extended holidays towards the end of H1 2018.
o Receivables days outstanding for the Healthcare business declined slightly to 102 (as at 31 December 2017: 103)
o Receivables days outstanding for the Distribution business stood at 107 versus 85 as at 31 December 2017 (H1 2017: 96)
Mr Prasanth Manghat, Chief Executive Officer, commented:
"The first half of 2018 saw NMC continue to demonstrate strong organic growth alongside complementary acquisitions, resulting in the realisation of improved financial results which more fully reflect the effect of previous integration and revenue enhancing activities. The benefits of scale, our mix of healthcare verticals and cross utilisation of assets and business streams is now starting to be reflected through enhanced revenue and improved efficiencies and margins.
Our previously announced agreement with Hassana Investment Company to form a joint venture, good macro-economic conditions in the healthcare sector in Saudi Arabia, and a strong country management team provides an exciting platform from which our Saudi Arabian business will be grown further.
The Group's new financing arrangements, with varying debt term dates spread into the longer term, provide a very strong financial base from which to continue to grow the business. While we continue to apply strict criteria to our expansion opportunities this backdrop gives us confidence in addressing any future funding requirements to support our ambitious growth plans
We therefore see continuing good growth potential across different parts of the Group in 2019 and beyond and remain confident in the long-term prospects of the business as we enter the second half of 2018."
A copy of this report will be available on the Company's Investor Relations website which can be accessed from www.nmchealth.com.
Contacts
Investors
NMC Health |
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Prasanth Manghat, Chief Executive Officer | +971 50 522 5648 |
Prashanth Shenoy, Chief Financial Officer | +971 56 329 0545 |
Asjad Yayha, Investor Relations | +971 56 219 0975 |
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Media: |
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FTI Consulting, London |
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Brett Pollard | +44 203 727 1000 |
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FTI Consulting, Gulf |
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Shane Dolan | +971 4 437 2100 |
Cautionary statement
These Interim Results have been prepared solely to provide additional information to shareholders to assess the Group's performance in relation to its operations and growth potential. These Interim Results should not be relied upon by any other party or for any other reason. Any forward-looking statements made in this document are done so by the directors in good faith based on the information available to them up to the time of their approval of this report. However, such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.
About NMC Health
NMC the leading private healthcare operator in the GCC with an international network of hospitals across 15 countries. NMC also ranks as one of the top 3 in-vitro fertilisation ("IVF") operators globally. The Group is also a leading provider of long-term medical care in the UAE through its subsidiary ProVita. Pursing an aggressive international expansion program from 2016, the company now has over 34% of its licensed bed capacity in the Kingdom of Saudi Arabia (KSA), where the company has introduced long-term and multi-specialty care services. Moreover, the recent formation of a joint-venture with GOSI/Hassana Investment Company is set to substantially boost the Group's bed capacity in KSA, with the JV expected to be the second largest healthcare operator in the Kingdom in terms of number of beds. NMC received over 5.7m patients in 2017. The Group is also a leading UAE supplier of products and consumables across several key market segments, with the major contribution coming from healthcare related products. The Group reported revenues of US$1.6 billion for the year ended 31 December 2017.
In April 2012 NMC was listed on the Premium Segment of the London Stock Exchange. NMC is a constituent of the FTSE 100 Index.
Interim Report
Business and Financial Review
Business overview
NMC Health again produced a strong performance in H1 2018, with good progress seen across all parts of the Group. Group EBITDA reached US$225.5m (+32.1% YoY) with an EBITDA margin of 24.2% (+220bps YoY). The Healthcare business continues to be the main driver for the Group's growth, accounting for 73% of Group revenues and 88% of Group EBITDA in H1 2018. The division's margins increased by 190bps YoY to reach 32.1% during the period, while margins of the Distribution division stood at 11.9%.
The Group continues to benefit from both revenue and EBITDA growth through the continued expansion of the UAE healthcare market, revenue enhancement, cost optimization and integration projects initiated over the last two financial years and from our planned geographic expansion across the GCC. Additionally, inorganic growth remained a prominent feature during H1 2018, with the remainder of 2018 set to continue to benefit from entities acquired during the year.
Our long-term strategy, predicated on capacity, capability and geographic expansion, along with the subsequent establishment of multi-brand verticals within our Healthcare Division, is enabling us to unlock both revenue and EBITDA synergies across the enlarged group, delivering significantly improved organic and inorganic growth for the Group. Going forward, the Company will increase focus on brand strategy as an important driver of continued success, with the initiation of convergence of brands an important part of this process.
Our largest facility, NMC Royal Hospital in Khalifa City, Abu Dhabi, continues to ramp-up well as it benefits from an increased focus on more complex medical, and thus higher value added, specialty healthcare segments. The number of operational beds reached 225 compared to 200 as at the end of 2017.
Al Zahra Hospital in Sharjah, our largest acquisition to date, has also performed strongly in the first half of 2018. The addition of long-term care beds Al Zahra towards the end of 2017 has significantly improved the mix of services available at the facility, with a rapid ramp-up witnessed at the newly added beds. Prior service improvements at the facility include upgrading of the Cardiology department, as well as the Emergency department to meet government requirements for accepting acute care patients. H1 2018 also witnessed the addition of a CosmeSurge clinic at Al Zahra, further adding to the provision of seamless healthcare solutions to the residents of Sharjah.
Although growing at a slower pace than the Healthcare division, our Distribution division also continues to perform well, with sustained growth supported by the acquisition of new brands and products across its portfolio during the period. Total Stock Keeping Units (SKUs) at the division stood at 113,500 versus c. 108,000 SKUs as at the end of 2017.
Strategic growth opportunities
In the first half of 2018, we announced a number of transactions which will provide excellent opportunities for growth in both the current financial year, as well as the foreseeable future.
Saudi Arabia
In June 2018, NMC announced the signing of the agreement to enter into a transformational partnership with Hassana Investment Company, the investment arm of General Organisation for Social Insurance, a Saudi Arabian government administered pension fund. NMC previously identified Saudi Arabia as a key strategic priority for growth. The creation of a large new healthcare platform through the JV (the second largest in KSA by number of beds) ideally positions the Company to capitalize on any future growth opportunities in the Kingdom.
In addition to the market size, the Saudi Arabian government's investor friendly policies and the government's healthcare privatisation program as part of the country's Vision 2030 plan, makes Saudi Arabia one of the most attractive healthcare markets in the region to invest in. Both NMC and Hassana have strong relationships with regulators in Saudi Arabia and believe the platform will enable both parties to significantly increase investment in the country.
The initial part of NMC's strategy to penetrate the attractive KSA healthcare market involved investment in a number of mid-sized assets across the country, including the acquisition of an 80% stake in Riyadh-based Al Salam Medical Group announced in January 2018 (consolidation from April 2018). The larger platform set to be provided by the joint venture is expected to translate into a significant increase in the pace of development of the Group's healthcare network in the country. This is expected to be achieved not just through the addition of general healthcare facilities when attractive propositions arise, but also through currently underserved services such as IVF, long term care, cosmetic services and centres of excellence in underserved medical segments, such as paediatric and cancer patients.
Discussions are progressing well in relation to the new joint venture which is expected to complete in Q4 2018. The Company's strong management team now in place in Saudi Arabia, combined with the strategic positioning of the joint venture, provides exciting opportunities and a positive outlook for NMC in the coming years.
CosmeSurge
In January 2018 we announced the acquisition of 70% of ComeSurge and related businesses, having managed the business under an O&M contract since September 2017. The addition of CosmeSurge enhances the Group's existing cosmetics and aesthetics services, contributing attractive levels of margin, and provides NMC with the opportunity of taking advantage of a number of identified revenue and cost synergy opportunities. Whilst the business has only been consolidated for one quarter of the period under review, since 1 April 2018, projects to increase patient cross-referral and the sharing of back-office support services are already underway. Group results for the second half of 2018 will include a full period effect of financial performance from the CosmeSurge business.
Operations & Management (O&M)
NMC continues to focus on leveraging further our healthcare services expertise across multiple geographies with opportunities to manage as well as own healthcare facilities. In January 2018 we announced that contracts had been signed to manage two Egyptian hospitals with a combined capacity of 860 beds. The O&M vertical continues to offer the highest margins amongst the Group's business lines, as well as offering a risk-controlled means of evaluating new medical segments and geographies for potential deployment of capital in the future.
H1 2018 also witnessed the signing of one of NMC's most prestigious O&M contracts to date for the management of Adnoc's healthcare facilities. The Group feels this contract can serve as a precursor for other attractive O&M contracts in the UAE as well as the wider GCC.
Fakih IVF
In early January 2018, NMC Health announced the acquisition of the outstanding 49% minority stake in Fakih IVF. Given the Group's ambitions to rapidly build on its current ranking as one of the top 3 IVF players in the world (by number of cycles), acquisition of the remaining Fakih IVF stake represents a vital step in solidifying NMC's fertility platform. In addition to the expansion already achieved in UAE and Oman in 2017, further expansion into other geographies, including the significant Saudi Arabian market, is planned. NMC is well positioned to be the leading consolidator in the fertility market and will continue to maintain the Group's market leading position.
Healthcare division review
Table: Summary Divisional performance
Healthcare Division performance (US$m unless stated) | H1 2018 | H1 2017 | YoY Growth |
Healthcare revenue | 706.0m | 561.1m | 25.8% |
Healthcare EBITDA | 226.8m | 169.3m | 34.0% |
Healthcare EBITDA margin | 32.1% | 30.2% | 190bps |
Healthcare Net Profit | 184.4m | 138.3m | 33.3% |
Total patients | 3.45m | 2.88m | 19.7% |
Revenue per patient | US$193.0 | US$183.5 | 5.2% |
Healthcare occupancy | 69.9% | 69.1% | 80bps |
Note: This table shows Divisional performance for the Healthcare division. The totals for each division when added will not reconcile to Group financial information above which is consolidated after eliminating intra-group trading
Total revenues across our four Healthcare business verticals reached US$ 706.0m (up by US$144.9m or 25.8% YoY). Revenue growth was achieved across the Group's assets with good performance delivered within the acquired assets, particularly Al Zahra Hospital, and strong continuing ramp up in our largest facility, NMC Royal in Khalifa City.
Multi-Specialty vertical
The Multi-Specialty vertical's exceptional growth in H1 2018 was driven by good performance at Al Zahra Hospital, Sharjah, NMC Royal Hospital in Khalifa City, continuing benefits from the roll-out of mandatory healthcare insurance in Dubai and the effect of integration and efficiency projects implemented over the last two years across NMC's network of existing and acquired facilities.
Total patient visits increased to 3.3m (+20.3% YoY) with a revenue per patient of US$146.2. As at 30 June 2018, the licensed bed capacity increased to 1,372 beds (+461 beds YOY) out of which 1,104 beds (+335 beds YOY) were operational. Despite the substantial rise in operational beds, occupancy increased 370bps YoY to reach 65.8%. This healthy combination has resulted from the fact that NMC utilizes a phased approach to adding new operational beds, first ensuring that previously opened beds have reached a healthy utilization level.
In our growing Sharjah and Northern Emirates regional cluster, Al Zahra Hospital in Sharjah, acquired in February 2017, performed very well and is gaining strong traction in the Sharjah market. The strategic combination of this facility and Dr Sunny Clinics, has provided an excellent basis for growth in this region. In addition to clinic referrals, Al Zahra is benefitting from the addition of a new Long Term Acute Care unit operating with specialist knowledge provided by ProVita. Moreover, while the timeline for implementation of mandatory insurance in Sharjah and the Northern Emirates remains unclear, our facilities are well placed to capitalize on any growth opportunity once the insurance roll-out commences.
The Group also reinforced its position as the most dominant private healthcare player in the Northern Emirates by opening new facilities in Ras Al Khaimah and Ajman. NMC remains the only healthcare operator in the UAE with a presence across 6 out of the 7 Emirates in the country.
In Abu Dhabi, our largest facility, NMC Royal Hospital, Khalifa City, continues to ramp up strongly, contributing $72m of revenue in H1 2018 (+31% YoY). The number of operational beds reached 225 in H1 2018 (200 as at end of 2017). The high quality of service provided at the facility, both in terms of medical care and complexity, has made NMC Royal one of the most sought-after hospital in the UAE for patients across the entire continuum of care. A key example in this regard is the collaboration with Cincinnati Children's Hospital, whereby monthly visits by staff from the leading American Hospital to NMC Royal has brought paediatric expertise previously unavailable in the country. This in turn is attracting patients from not just beyond Abu Dhabi, but also from the wider GCC.
Our Dubai-based facilities continue to grow strongly on the back of the roll-out of mandatory insurance in recent years. NMC's largest facilities in the Emirate, Dubai Specialty Hospital and DIP General Hospital, remain amongst the strongest growing assets in the Group's network, with expansions planned/underway at both facilities. Given the healthy outlook for the healthcare sector in Dubai, brownfield and greenfield growth opportunities are currently being pursued by the Group.
The Group continued to bolster its position in the attractive Saudi healthcare market with the addition of Al Salam Medical Group in H1 2018. Moreover, the formation of a new healthcare platform through a joint-venture with Hassana/GOSI is anticipated to substantially increase the pace of expansion of NMC's healthcare network in the Kingdom in the coming years.
Oman also continues to serve as an attractive market for NMC, where the Company is in process of reinforcing its position as one of the leading private healthcare operators in the country. The commencement of roll-out of mandatory healthcare insurance in Oman further enhances its attractiveness and the Group intends to continue to pursue organic and inorganic opportunities to build its market share.
The Multi-Specialty vertical also benefited from the addition of CosmeSurge to NMC's healthcare network in H1 2018. The largest cosmetics business in the GCC region, CosmeSurge's already attractive growth and margin profile is expected to further improve on the back of its network expansion along with NMC's existing facilities. For example, H1 2018 witnessed the opening of CosmeSurge clinics in Al Zahra Hospital in Sharjah, as well as in other Northern Emirates. Moreover, H2 2018 is set to witness the entry of CosmeSurge into the Saudi market as well, which represents the largest cosmetics market in the region.
Maternity & Fertility vertical
The Maternity & Fertility vertical posted 16.6% YoY revenue growth in H1 2018. The increase was driven by the fertility business in particular, with Fakih IVF benefiting from organic growth, while Clinica Eugin recorded a combination of organic and inorganic growth. We believe NMC's IVF business ranks as the second largest in the world in terms of number of cycles and was spread across 8 countries by the end of the first half of 2018. The fertility business continues to maintain a unique position within NMC's healthcare portfolio, with a truly global outlook. As such, the Group continues to identify new markets to enter through both organic and inorganic means. Among these markets, Saudi Arabia represents one of the most attractive opportunities, where the Company intends to build a presence from H2 2018 onwards.
The Brightpoint Royal Women's Hospital was recently renamed NMC Royal Women's Hospital as part of the Group's updated brand strategy. The facility continues to perform in line with management expectations, with occupancy at the facility reaching 73.4% in H1 2018. With bed utilization at the facility reaching healthy levels, efforts are currently underway to add further value through improving the mix of services offered at the hospital.
Revenues for the Maternity & Fertility vertical reached US$ 114.3m (+16.6% YoY), with total patient visits of 106k (+3% YoY) and revenue per patient of US$1,072.6.
Long-Term & Home Care vertical
H1 2018 witnessed the completion of the acquisition of a 100% stake in Chronic Care Specialist Medical Centre (CCSMC), with financials from the facility consolidated for only 2 month during the period. Given the absence of any significant competitor for CCSMC in Jeddah, utilization ramp-up at the facility is expected to remain very healthy for the foreseeable future. Additionally, the Group reinforced its dominant position as the home care service provider in the UAE through the acquisition of a 70% stake in Premier Care, a leading home medical and home care solution provider.
Revenues for Long-term & Home Care vertical reached US$ 63.1m with 326 beds operational at an occupancy rate of 84% in the period.
Operation & Management vertical
Building on the successful addition of several government and private O&M contracts last year, H1 2018 witnessed the addition to two prominent new contracts: management of hospitals in Egypt, the first step into the wider Emerging Markets for NMC, as well as the management of Adnoc's healthcare facilities in the UAE. Management remains focused on growing the O&M vertical strongly, both within and outside the UAE.
The total revenue contribution from O&M activities in the period reached US$4.9m in H1, 2018 (+47.8% YoY).
Distribution division
Table: Summary Divisional performance
Distribution Division performance (US$m unless stated) | H1 2018 | H1 2017 | YoY Growth |
Distribution revenue | 255.0m | 235.3m | 8.4% |
Distribution EBITDA | 30.3m | 25.5m | 18.8% |
Distribution EBITDA margin | 11.9% | 10.8% | 110bps |
Distribution Net Profit | 28.4m | 23.7m | 19.8% |
Note: This table shows Divisional performance for the Distribution division. The totals for each division when added will not reconcile to Group financial information above which is consolidated after eliminating intra-group trading
Distribution division revenues grew by 8.4% YoY to reach US$ 255.0m. This growth was supported by continued increase in the number of SKUs, which reached 113,500 (108,000 as at 31 December 2017).
"Other income" benefits from increased activity in Distribution division
H1 2018 benefited from higher "Other income", which in turn benefited from increased activity in the Distribution business. As part of the complete supply chain solution provided by the Distribution business, NMC manages promotions and marketing plans on behalf of its customers. Revenues from this source are recorded in "Other income".
Maintaining sharp focus on technological developments in the sector
NMC is ardently keeping an eye on global digital health trends, such as mobile health, artificial intelligence enabled healthcare platforms, genomics and robotics. These developments are expected to have a dramatic impact on healthcare delivery in the coming years. NMC is thus exploring novel ways to collaborate with industry leaders in these technological fields to pioneer a futuristic healthcare value chain that touches the trifecta of improving accessibility, enhancing clinical outcomes and reducing costs.
Outlook
Bolt-on acquisitions to bolster positive outlook for H2 2018
Continued strong demand for NMC's healthcare services, combined with a healthy ramp-up at key facilities, particularly NMC Royal, translate into a strong outlook for H2 2018. This positive view is further bolstered by bolt-on acquisitions completed after H1 2018 (initial payments for these acquisitions are recorded on the Balance Sheet as "Advances paid for acquisitions" as at 30 June 2018). Focused largely on the Multi-Specialty vertical, the acquisitions are mainly based out of the UAE.
Given the abovementioned positive developments, management is in process of reviewing its earlier guidance for 2018 (22% YoY revenue growth and EBITDA around US$465m), with an update expected to be provided at the 2018 Capital Markets Day (CMD). Details of the CMD are as follows:
Location: London Stock Exchange, 10 Paternoster Row, London EC4M 7LS
Date: 22 October 2018
Time: 12:30 - 3:30pm (Starting with lunch)
RSVP: |
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NMC Health Investor Relations | FTI Consulting |
Asjad Yahya, CFA | Mo Noonan |
Mobile: +971562190975 | Tel: +44 20 3727 1390 |
Email: asjad.yahya@nmc.ae | Email: NMCHealth@fticonsulting.com |
Financial review
During the first half of the 2018 financial year, the Group continued to demonstrate strong growth at both the Group and divisional level. Group revenues increased by 20.2% to US$932.0m (H1, 2017: US$775.2m). Group EBITDA improved by 32.1% to US$225.5m (H1, 2017: US$170.7m).
Revenue in the Healthcare division for the first half of 2018 increased by 25.8% to US$706.0m (H1, 2017: US$561.1m). Healthcare division EBITDA was US$226.8m for the first half of the year, which represented growth of 34.0% compared to same period last year (H1, 2017: US$169.3m). EBITDA margins were at 32.1%, which is a 190bps growth over the comparative period in 2017 (30.2% for H1, 2017) due to improved margins and value-added services offered in the assets acquired.
Revenue in the Distribution division grew by 8.4% to US$255.0m (H1, 2017: US$235.3m) compared to the same period last year. Distribution division EBITDA was US$30.3m (H1, 2017: US$25.5m), with an EBITDA margin of 11.9% (H1, 2017: 10.8%).
Adjusted Earnings per share were US$ 0.669 (H1, 2017 US$ 0.514) during the period. Adjusted Earnings per share is calculated on a like for like basis for both periods using the number of shares in issue as at 30 June and after adjusting net income for non-operating one-off expenses. Non-operating one-off expenses consisted of unamortised finance fees in respect of the previous syndication loan, transaction costs in respect of business combinations, transaction costs in respect of convertible bond, interest expense on convertible bond, impairment of assets and intangible amortisations in respect of business combinations.
Basic Earnings per share reported at US$ 0.561 for H1, 2018, increased from US$ 0.429 in H1, 2017.
Dividends
The Board remains committed to its previously stated policy to target a dividend pay-out ratio of 20-30% of profit after tax. The Board believes that this is a progressive dividend policy, whilst maintaining an appropriate level of dividend cover. The dividend policy not only reflects the strong cash flow characteristics of the Group, but also allows the retention of cash to fund the ongoing operating requirements and continued investment which the Company has highlighted for its long-term growth.
A dividend of 13.0 pence per share was approved and paid as a final dividend for the full year for 31 December 2017. The Board has determined that an interim dividend will not be declared but that any dividend for the 2018 financial year will be paid fully as a final dividend.
Capital expenditure
Total capital expenditure in the six months ended 30 June 2018 was US$55.7m (H1, 2017: US$ 22.9m), in line with our expectations.
Of the total capital expenditure spend during the period, US$17.2m (June 2017: US$10.0m) related to new capital projects and US$38.5m (June 2017: US$12.9m) related to further capital investment in our existing facilities.
The Group continues to have sufficient cash or debt facilities to progress its current capital projects programme.
Cash
The level of cash in the Group as at 30 June 2018 was in line with management expectations. During the period the number of average receivable days increased slightly from 100 days at 31 December 2017 to 107 days at 30 June 2018.
Debt
Net debt (excluding liability portion of convertible bond) increased to US$ 1,152.5m. Cash and short term bank deposits amounted to US$ 432.6m (2017: 387.6m) with a total debt balance at US$ 1,585.1m (2017: 1,399.0m). This is in line with management expectations.
The Group during the last few years grew substantially and with a view to implement a revised capital structure commensurate with the enlarged size, a major portion of the debt was refinanced with a new syndicated facility of US$ 2.0 billion. The new facility was used to settle an existing syndicated loan, acquisition / general purposes and provide headroom for the future needs. New facilities are completely repayable within 18 to 60 months These loans are secured by corporate guarantees from NMC Health plc and certain operating subsidiaries of the Group.
Convertible Bond
In April 2018, the Group issued convertible bonds with an aggregate principal amount of US$450 million with a cash coupon rate of 1.875% per annum, payable semi-annually maturing in April 2025, with a call / put option in in 2023.These bonds are listed on the Open Market of the Frankfurt Stock Exchange. The bondholders have the right to convert their bond into ordinary shares at the conversion price at any time between 11 June 2018 and their maturity date into a fixed number of ordinary shares of the parent of the group on the basis of a fixed price per share of $72.7301. The fair value of the liability component of the Group's convertible bond is US$ 377.7 million (net of transaction costs).
In addition to the above facilities, term loans also include other short term revolving loans which get drawn down and repaid over the period.
Going concern
The directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, the directors continue to adopt the going concern basis in preparing the condensed financial statements.
Statement of directors' responsibilities
The Interim report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Interim Report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority. The Disclosure and Transparency Rules ("DTR") require that the accounting policies and presentation applied to the half-yearly figures must be consistent with those applied in the latest published annual accounts, except where the accounting policies and presentation are to be changed in the subsequent annual accounts, in which case the new accounting policies and presentation should be followed, and the changes and the reasons for the changes should be disclosed in the Interim Report, unless the United Kingdom Financial Conduct Authority agrees otherwise.
The directors confirm that this condensed set of financial statements has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting' as adopted by the European Union, and that to the best of their knowledge, the Business and Finance Reviews contained herein includes a fair review of:
§ The important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements as required by DTR 4.2.7R;
§ The principal risks and uncertainties for the remaining six months of the year as required by DTR 4.2.7R; and
§ Related party transactions that have taken place in the first six months of the current financial year that have materially affected the financial position or performance of the Group during the first six months of the current financial year as required by DTR 4.2.8R.
For and on behalf of the Board of Directors:
Prashanth Shenoy
Chief Financial Officer
19 August 2018
Principal risks and uncertainties
The Board considers the risks and uncertainties associated with its business, with the risks connected with the Group's expansion program being some of the key risks faced by the Group.
The detailed list of the principal risks and uncertainties faced by the Group, and the mitigation of those risks, are listed below.
Risk Class | Description and Potential Impact | Controls and Mitigations |
Investment | Bad decisions in relation to either acquisition or organic growth investments or an inability to appropriately execute integration or new facility ramp-up plans may result in: ● Lower Return on Investment (ROI); ● Lower revenue than expected; ● Decreased margins and market share; ● Potential for impairment of assets; ● Potential difficulty in raising future finance.
| ● Board oversight in approving and monitoring strategic projects ● Project management controls ● Detailed market and business appraisal processes ● Focus on integration pathway to improve Group revenue generation from intra-group business referrals and multi-brand facility sharing ● Strategy to acquire international know-how through acquisition plan ● Re-alignment of existing assets within the Group's hub and spoke model (e.g. existing specialty hospitals feeding the regional NMC Royal Hospital, Khalifa City)
|
Competition | Increased competition due to high private and public investments in the UAE healthcare sector and associated investments coming from new entrants or existing player partnerships would lead to market share loss and potential reduction in access to future growth in UAE healthcare spend. | ● Integrated Hub-Spoke model ● Growing healthcare network ● Partnership with Government hospitals ● The development of international partnerships and use of increased know-how gained through strategic growth plan ● Diversification of patient base ● Variety in service offerings
|
Financial | Failure to focus on innovation and technological advances and effectively deliver new services. Inexperience of operating in new markets/offerings leads to missed opportunity or poor service delivery | ● Frequent monitoring of both fixed and variable cost ● Synergy tracking and reporting ● Acquiring the skills associated with the M&A transactions ● Strategy to target investment in innovation and future healthcare services development
|
Financial | Potential adverse effect NMC's margin as a result of unexpected regulatory or cultural changes affecting the provision of healthcare, the basis of the healthcare insurance structure or increases in medical inflation and pricing pressure and bargaining from key insurance providers in the Group's key markets, would result in less profitability | ● Diversification of the revenue streams ● Increased collaboration between different group assets and businesses ● Frequent monitoring of both fixed and variable cost ● Good relationships with insurance providers ● Strategy to increase patient volumes and focus on clinical specialisms ● M&A Strategy in new markets
|
Macro-economic | Potential instability in revenue impairing cash flow and working capital health as a result of global and regional demographic, macro-economic and geopolitical factors.
| · UAE is a stable and booming market to operate in · Diverse business and revenue streams · Long Term debt facilities and unutilized working capital limits · Strong banking and supplier relationships
|
Financial | Failure to maximize the opportunity of acquisitions though successful integration strategies or through ineffective management structure or operating model may results in: ● Increased market and regulatory/ legal obligations; ● Increased culture resistance and complexity in shifting the governance model from enterprise to corporate structure; ● Increased operational exposure due to the complexity of integrating higher number of spokes to centralized hub of excellence; ● Increased investment risk due to weak due diligence and other mitigates.
| ● Proper due diligence ● Post-acquisition integration plan ● Rigorous analysis of value of the acquisition ● Focus on the corporate cultures involved ● Executive committee reporting and targets ● Synergy tracking and reporting ● Acquiring the skills associated with the M&A transactions
|
Technology | A Data Security (e.g. VIP patient records) breach due to either intentional malicious cyber-attack or unintentional data or system loss resulting in reputational damage, operational disruption or regulatory breach. | ● ISO 27001 certified framework for IT policies and controls. ● Strict measures towards clients' data and records ● Investment in new Hospital Information
System and ERP financial system approved by the Board and implementation in progress
|
Compliance & Regulation | Failure to comply with multi regulatory and standards bodies' requirements could result in financial fines, inability to renew licenses, as well as NMC reputation damage. | ● Quality & Standards Department monitors regulatory changes ● Partnership with government ● Good relationships with regulators and accrediting organizations ● Continuous focus on delivering high levels of service
|
|
|
|
Product & Service | Failure to comply with internationally recognized clinical care and quality standards, clinical negligence, the misdiagnosis of medical conditions or pharmaceuticals and the supply of unfit products across both divisions could result in regulatory sanction, licence removal, significant reputational damage, loss of patient and customer confidence and potential criminal proceedings. | ● Doctors subject to rigorous licensing procedures which operate in the UAE ● Healthcare division is a regulated business and five of the Group's principal hospitals have achieved, or are in the process of achieving, international quality standards accreditation ● Many aspects of the operation of the Distribution division, including the sale of pharmaceuticals, is regulated in the UAE ● Board oversight and integrated governance structure ● Medical malpractice insurance to cover any awards of financial damages ● Continuous training and development programs
|
Human Capital | Failure to retain/acquire key professionals or inability to acquire sufficient Medical staff could potentially lead to inability to deliver required healthcare services and execute growth strategy. | ● Partnership with education institutes ● Effective sourcing strategies & recruitment campaigns ● Ongoing review of senior management resources and succession plans in place for key positions ● Competitive salary packages, growth and good working conditions act as a good retention tool ● Clear career path for staff and continuous training and development programs
|
Independent review report to NMC Health plc
Introduction
We have been engaged by the Company to review the condensed set of consolidated financial statements in the half-yearly financial report for the six months ended 30 June 2018 which comprises the condensed consolidated income statement, the condensed consolidated statement of other comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and related notes 1 to 25. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual consolidated financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2018 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
London
CONDENSED CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2018
| Notes | Unaudited | |
|
| Period ended 30 June 2018 US$ '000 | Period ended 30 June 2017 US$ '000 |
Revenue | 7 | 931,970 | 775,153 |
Direct costs |
| (555,494) | (470,282) |
|
| ----------------------- | ----------------------- |
GROSS PROFIT |
| 376,476 | 304,871 |
General and administrative expenses |
| (191,997) | (160,841) |
Other income
|
| 41,067 | 26,621 |
|
| ---------------------- | ----------------------- |
PROFIT FROM OPERATIONS BEFORE DEPRECIATION, AMORTISATION , TRANSACTION COSTS AND IMPAIRMENT |
| 225,546 | 170,651 |
Transaction costs in respect of business combinations | 6 | (2,078) | (4,458) |
Transaction costs in respect of convertible bond |
| (174) | - |
Depreciation | 10 | (36,695) | (28,051) |
Amortisation | 11 | (6,713) | (7,252) |
Impairment of assets | 10 | (106) | - |
|
| ----------------------- | ----------------------- |
PROFIT FROM OPERATIONS |
| 179,780 | 130,890 |
Finance costs |
|
|
|
Borrowings |
| (48,365) | (27,872) |
Convertible bond |
| (3,189) | - |
Finance income |
| 3,616 | 3,082 |
Unamortised finance fees written off |
| (13,124) | (6,794) |
|
| ----------------------- | ----------------------- |
PROFIT FOR THE PEROD BEFORE TAX |
| 118,718 | 99,306 |
Tax | 8 | (2,026) | (1,499) |
|
| ----------------------- | ----------------------- |
PROFIT FOR THE PERIOD |
| 116,692 | 97,807 |
|
| ========== | ========== |
Profit for the period attributable to: |
|
|
|
Equity holders of the Parent |
| 116,494 | 87,729 |
Non-controlling interests |
| 198 | 10,078 |
|
| ----------------------- | ----------------------- |
PROFIT FOR THE PERIOD |
| 116,692 | 97,807 |
|
| ========== | ========== |
Earnings per share for profit attributable to the |
|
|
|
equity holders of the Parent: |
|
|
|
Basic EPS (US$) | 9 | 0.561 | 0.429 |
Diluted EPS (US$) | 9 | 0.557 | 0.426 |
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
For the six months ended 30 June 2018
| Unaudited | |
| Period ended 30 June 2018 US$ '000 | Period ended 30 June 2017 US$ '000 |
|
|
|
Profit for the period
| 116,692 | 97,807 |
|
|
|
Other comprehensive income |
|
|
Other comprehensive income to be reclassified to income statement in subsequent periods (net of tax) |
|
|
Exchange difference on translation of foreign operations | (5,790) | 9,586 |
|
|
|
Other comprehensive income not to be reclassified to income statement in subsequent periods (net of tax) |
|
|
Re-measurement gains on defined benefit plans | - | 1,011 |
| ----------------------- | ----------------------- |
Other comprehensive income for the period (net of tax) | (5,790) | 10,597 |
| ----------------------- | ----------------------- |
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 110,902 | 108,404 |
| ========== | ========== |
|
|
|
Total comprehensive income attributable to : |
|
|
Equity holders of the Parent | 111,376 | 97,211 |
Non-controlling interests | (474) | 11,193 |
| ----------------------- | ----------------------- |
Total comprehensive income | 110,902 | 108,404 |
| ========== | ========== |
These results relate to continuing operations of the Group. There are no discontinued operations in the current and prior period.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2018
|
| Unaudited | Audited |
|
| 30 June | 31 December |
|
| 2018 | 2017 |
| Notes | US$'000 | US$'000 |
ASSETS
|
|
|
|
Non-current assets |
|
|
|
Property and equipment | 10 | 712,828 | 607,092 |
Intangible assets | 11 | 1,511,203 | 1,156,904 |
Deferred tax assets | 8 | 3,518 | 3,418 |
Advances paid for acquisitions | 6 | 69,055 | - |
Other non-current assets |
| 7,421 | 43,090 |
|
| ------------------------- | ----------------------- |
|
| 2,304,025 | 1,810,504 |
|
| ------------------------- | ----------------------- |
Current assets |
|
|
|
Inventories | 13 | 208,640 | 181,330 |
Accounts receivable and prepayments | 14 | 671,301 | 518,842 |
Loan receivable | 12 | 2,001 | 32,187 |
Amounts due from related parties | 21 | 6,753 | 1,776 |
Income tax receivable |
| 2,589 | 3,063 |
Bank deposits | 15 | 130,470 | 185,611 |
Bank balances and cash | 15 | 302,145 | 202,002 |
|
| ------------------------ | -------------------- |
|
| 1,323,899 | 1,124,811 |
|
| ------------------------ | ----------------------- |
Asset held for sale |
| 5,005 | 3,693 |
|
| ------------------------ | ----------------------- |
TOTAL ASSETS |
| 3,632,929 | 2,939,008 |
|
| ========== | ========== |
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
Equity |
|
|
|
Share capital | 16 | 32,440 | 31,928 |
Share premium | 16 | 633,488 | 492,634 |
Group restructuring reserve |
| (10,001) | (10,001) |
Foreign currency translation reserve |
| 280 | 5,398 |
Option redemption reserves |
| (40,373) | (33,483) |
Convertible bond equity component | 19 | 64,960 | - |
Retained earnings | 17 | 492,076 | 603,240 |
|
| ----------------------- | ----------------------- |
Equity attributable to equity holders of the Parent
|
| 1,172,870 | 1,089,716 |
|
|
|
|
Non-controlling interests
|
| 38,681 | 54,910 |
|
| ------------------------- | ----------------------- |
Total equity |
| 1,211,551 | 1,144,626 |
|
| ------------------------- | ----------------------- |
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2018
|
| Unaudited | Audited |
|
| 30 June | 31 December |
|
| 2018 | 2017 |
| Notes | US$'000 | US$'000 |
Non-current liabilities |
|
|
|
Term loans | 18 | 1,112,099 | 987,840 |
Convertible bond | 19 | 381,087 | - |
Employees' end of service benefits |
| 49,463 | 41,374 |
Other payables |
| 15,211 | 38,984 |
Option redemption payable |
| 18,242 | 12,728 |
Deferred tax liabilities | 8 | 8,298 | 9,693 |
|
| ------------------------- | ----------------------- |
|
| 1,584,400 | 1,090,619 |
|
| ------------------------- | ----------------------- |
Current liabilities |
|
|
|
Accounts payable and accruals |
| 241,266 | 209,470 |
Other payables |
| 22,337 | 18,110 |
Option redemption payable |
| 26,019 | 26,019 |
Amounts due to related parties | 21 | 25,259 | 28,472 |
Bank overdrafts and other short term borrowings |
| 197,308 | 207,034 |
Term loans | 18 | 275,713 | 204,154 |
Employees' end of service benefits |
| 8,381 | 6,905 |
Income tax payable |
| 4,956 | 2,265 |
Dividend payable | 20 | 35,739 | 1,334 |
|
| ----------------------- | ----------------------- |
|
| 836,978 | 703,763 |
|
| ------------------------ | ----------------------- |
Total liabilities |
| 2,421,378 | 1,794,382 |
|
| ------------------------- | ----------------------- |
TOTAL EQUITY AND LIABILITIES |
| 3,632,929 | 2,939,008 |
|
| ========== | ========== |
The condensed consolidated financial statements were authorised for issue by the board of directors on 19 August 2018 and were
signed on its behalf by
Prasanth Manghat | Prashanth Shenoy |
Chief Executive Officer | Chief Financial Officer |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2018
|
| Attributable to the equity holders of the Parent |
| |||
| Share capital | Share premium | Group restructuring reserve | Retained earnings | Foreign currency translation reserve | |
US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 | ||
|
|
|
|
|
| |
Balance as at 1 January 2018 (audited) | 31,928 | 492,634 | (10,001) | 603,240 | 5,398 | |
IFRS 9 credit risk adjustment (Note 2.2) | - | - | - | (10,695) | - | |
| ----------------------- | ----------------------- | ----------------------- | ----------------------- | ----------------------- | |
Balance as at 1 January 2018 (adjusted) | 31,928 | 492,634 | (10,001) | 592,545 | 5,398 | |
Profit for the period | - | - | - | 116,494 | - | |
Other comprehensive income | - | - | - | - | (5,118) | |
| ----------------------- | --------------------- | ----------------------- | --------------------- | ----------------------- | |
Total comprehensive income for the period | - | - | - | 116,494 | (5,118) | |
Dividend (Note 20) |
|
|
| (35,739) |
| |
Issuance of share capital-new (Note 16) | 477 | 138,714 | - | - | - | |
Share exercise for stock option (Note 16) | 35 | 2,140 | - | (2,175) | - | |
Equity component convertible bond (Note 19) | - | - | - | - | - | |
Option redemption reserve (Note 6) | - | - | - | - | - | |
Acquisition of non-controlling interest (Note 5) | - | - | - | (184,406) | - | |
Acquisition of subsidiaries (Note 6) | - | - | - | - | - | |
Adjustment to prior year business |
|
| - |
|
| |
combinations (Note 6) | - | - | - | - | - | |
Adjustment for current period (Note 6) |
|
|
| 566 |
| |
Share based payments | - | - | - | 4,791 | - | |
| ----------------------- | --------------------- | ----------------------- | --------------------------- | ------------------------ | |
Balance as at 30 June 2018 (unaudited) | 32,440 | 633,488 | (10,001) | 492,076 | 280 | |
| ========== | ======== | ========== | ========== | ========= | |
|
| Attributable to the equity holders of the Parent |
|
| ||
| Option redemption reserves | Equity component of convertible bonds | Total | Non- controlling interest | Total | |
US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 | ||
|
|
|
|
|
| |
Balance as at 1 January 2018 (audited) | (33,483) | - | 1,089,716 | 54,910 | 1,144,626 | |
IFRS 9 credit risk adjustment (Note 2.2) | - | - | (10,695) | - | (10,695) | |
| ----------------------- | ----------------------- | ----------------------- | ----------------------- | ----------------------- | |
Balance as at 1 January 2018 (adjusted) | (33,483) | - | 1,079,021 | 54,910 | 1,133,931 | |
Profit for the period | - | - | 116,494 | 198 | 116,692 | |
Other comprehensive income | - | - | (5,118) | (672) | (5,790) | |
| ----------------------- | ----------------------- | --------------------- | ----------------------- | ----------------------- | |
Total comprehensive income for the period | - | - | 111,376 | (474) | 110,902 | |
Dividend (Note 20) |
|
| (35,739) | (1,700) | (37,439) | |
Issuance of share capital-new (Note 16) | - | - | 139,191 | - | 139,191 | |
Share exercise for stock option (Note 16) | - | - | - | - | - | |
Equity component convertible bond (Note 19) | - | 64,960 | 64,960 | - | 64,960 | |
Option redemption reserve (Note 6) | (6,890) | - | (6,890) | - | (6,890) | |
Acquisition of non-controlling interest (Note 5) | - | - | (184,406) | (40,926) | (225,332) | |
Acquisition of subsidiaries (Note 6) | - | - | - | 26,591 | 26,591 | |
Adjustment to prior year business |
| - |
|
|
| |
combinations (Note 6) | - | - | - | (1,606) | (1,606) | |
Adjustment for current period (Note 6) |
|
| 566 | 1,886 | 2,452 | |
Share based payments | - | - | 4,791 | - | 4,791 | |
| ----------------------- | ----------------------- | --------------------------- | ------------------------- | --------------------- | |
Balance as at 30 June 2018 (unaudited) | (40,373) | 64,960 | 1,172,870 | 38,681 | 1,211,551 | |
| ========== | ========== | ========== | ========= | ========= | |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2018
|
| Attributable to the equity holders of the Parent |
| |||
| Share capital | Share premium | Group restructuring reserve | Retained earnings | Foreign currency translation reserve | |
US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 | ||
|
|
|
|
|
| |
Balance as at 1 January 2017 (audited) | 31,910 | 491,778 | (10,001) | 436,337 | (8,128) | |
Profit for the period | - | - | - | 87,729 | - | |
Other comprehensive income | - | - | - | 1,011 | 8,471 | |
| ----------------------- | --------------------- | ----------------------- | --------------------- | ----------------------- | |
Total comprehensive income for the period |
|
|
| 88,740 | 8,471 | |
Dividend (Note 20) | - | - | - | (27,779) | - | |
Deferred tax adjustment | - | - | - | 310 | - | |
Adjustment to prior year business | - | - | - | - | - | |
combinations (Note 6) | - | - | - | - | - | |
Acquisition of subsidiaries (Note 6) | - | - | - | - | - | |
Share based payments | - | - | - | 3,679 | - | |
| ----------------------- | --------------------- | ----------------------- | --------------------------- | ------------------------ | |
Balance as at 30 June 2017 (unaudited) | 31,910 | 491,778 | (10,001) | 501,287 | 343 | |
| ========== | ======== | ========== | ========== | ========= | |
|
|
|
|
|
| |
|
| Attributable to the equity holders of the Parent |
| |||
| Option redemption reserves | Equity component of convertible bonds | Total | Non- controlling interest | Total |
|
US$ '000 | US$ '000 | US$ '000 | US$ '000 | US$ '000 |
| |
|
|
|
|
|
|
|
Balance as at 1 January 2017 (audited) | (35,027) | - | 906,869 | 42,002 | 948,871 |
|
Profit for the period | - | - | 87,729 | 10,078 | 97,807 |
|
Other comprehensive income | - | - | 9,482 | 1,115 | 10,597 |
|
| ----------------------- | ----------------------- | --------------------- | ----------------------- | ----------------------- |
|
Total comprehensive income for the period | - | - | 97,211 | 11,193 | 108,404 |
|
Dividend (Note 20) | - | - | (27,779) | (14,379) | (42,158) |
|
Deferred tax adjustment | - | - | 310 | 134 | 444 |
|
Adjustment to prior year business | - | - | - | - | - |
|
combinations (Note 6) | - | - | - | 1,631 | 1,631 |
|
Acquisition of subsidiaries (Note 6) | - | - | - | 6,332 | 6,332 |
|
Share based payments | - | - | 3,679 | - | 3,679 |
|
| ----------------------- | ----------------------- | --------------------------- | ------------------------- | --------------------- |
|
Balance as at 30 June 2017 (unaudited) | (35,027) | - | 980,290 | 46,913 | 1,027,203 |
|
| ========== | ========== | ========== | ========= | ========= |
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2018
|
| Unaudited | ||
|
| Period ended 30 June 2018 | Period ended 30 June 2017 | |
| Notes | US$ '000 | US$ '000 | |
OPERATING ACTIVITIES |
|
|
| |
Profit for the period before tax |
| 118,718 | 99,306 | |
Adjustments for: |
|
|
| |
Depreciation | 10 | 36,695 | 28,051 4908 | |
Employees' end of service benefits |
| 5,850 | 4,714 | |
Amortisation of Intangible assets | 11 | 6,713 | 7,252 | |
Finance income |
| (3,616) | (3,082) | |
Finance costs |
| 51,554 | 27,872 | |
Loss on disposal of property and equipment |
| 1 | 185 | |
Foreign exchange loss |
| 347 | - | |
Unamortised finance fees written off |
| 13,124 | 6,794 | |
Impairment of assets |
| 106 | - | |
Transaction cost in respect of bond |
| 174 | - | |
Share based payments expense |
| 4,791 | 3,679 | |
|
| ------------------------- | ------------------------- | |
|
| 234,457 | 174,771 | |
Working capital changes: |
|
|
| |
Inventories |
| (19,935) | (4,770) | |
Accounts receivable and prepayments |
| (95,374) | (62,086) | |
Amounts due from related parties |
| (4,977) | 4,445 | |
Accounts payable and accruals |
| (27,729) | (14,470) | |
Amounts due to related parties |
| (3,425) | (161) | |
|
| ------------------------- | ------------------------- | |
Net cash from operations |
| 83,017 | 97,729 | |
Employees' end of service benefits paid |
| (3,815) | (1,772) | |
Income tax receipt / (paid) |
| 370 | (1,100) | |
|
| ------------------------- | ------------------------- | |
Net cash from operating activities |
| 79,572 | 94,857 | |
|
| ------------------------- | ------------------------- | |
INVESTING ACTIVITIES |
|
|
| |
Purchase of property and equipment | 10 | (55,725) | (22,914) | |
Purchase of intangible assets | 11 | (690) | (463) | |
Proceeds from disposal of property and equipment |
| 160 | 32 | |
Acquisition of subsidiaries, net of cash acquired | 6 | (359,605) | (609,187) | |
Purchase consideration paid in advance |
| (69,055) | (1,645) | |
Asset held for sale |
| (1,312) | (1,218) | |
Bank deposits maturing in over 3 months |
| 41,055 | (39,954) | |
Restricted cash |
| (32,122) | 83,301 | |
Finance income received |
| 1,995 | 535 | |
Loan receivables | 12 | (8,725) | (1,185) | |
Other non-current assets |
| (404) | (1,659) | |
Contingent consideration paid for acquisition | 24 | (2,422) | (2,165) | |
|
| ------------------------- | ------------------------- | |
Net cash used in investing activities |
| (486,850) | (596,522) | |
|
| ------------------------- | ------------------------- | |
FINANCING ACTIVITIES |
|
|
| |
New term loans and draw-downs | 18 | 898,783 | 454,437 | |
Repayments of term loans | 18 | (716,280) | (170,546) | |
Transaction cost of term loan |
| (21,228) | (15,685) | |
Receipts of short term borrowings |
| 140,879 | 169,929 | |
Repayment of short term borrowings |
| (141,532) | (175,676) | |
Convertible bond | 19 | 450,000 | - | |
Transaction cost of convertible bond | 19 | (7,316) | - | |
Dividend paid to shareholders |
| - | (27,779) | |
Acquisition of non-controlling interest |
| (82,497) | - | |
Deferred consideration paid for acquisition |
| (3,600) | (4,356) | |
Dividend paid to non- controlling interest |
| (3,034) | (7,215) | |
Other payable |
| (2,764) | 1,200 | |
Finance costs paid |
| (41,126) | (21,942) | |
|
| ------------------------- | ------------------------- | |
Net cash from financing activities |
| 470,285 | 202,367 | |
|
| ------------------------- | ------------------------- | |
|
|
|
| |
INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
| |
EQUIVALENTS |
| 63,007 | (299,298) | |
|
|
|
| |
Cash and cash equivalents at 1 January |
| 206,462 | 433,403 | |
|
| ------------------------- | ------------------------- | |
CASH AND CASH EQUIVALENTS AT 30 JUNE DECEMBER
| 15 | 269,469 | 134,105 | |
|
| ========== | ========== | |
The attached notes 1 to 25 form part of the condensed consolidated financial statements.