RHÖN-KLINIKUM AG | 08/09/2007

Results of H1 2007

  • Success and growth course confirmed
  • Revenue raised by 7.4% to € 1.0 billion
  • Expectations met with net consolidated profit of € 52.6 million
  • Universitätsklinikum Gießen/Marburg reaches break-even
  • Forecast confirmation for full-year 2007: Revenue of € 2 billion and net consolidated profit of € 102 million

The chairman of the Board of Management of the listed hospital group RHÖN-KLINIKUM AG, Wolfgang Pföhler, regards the performance and results of the first and second quarter of 2007 “as a confirmation of our success and growth course. Both patient contacts and revenues and net consolidated profit were raised once again versus the previous year.”

Compared with the first half of 2006, revenues grew in the first six months of 2007 by € 68.9 million (+7.4%) to € 1,007.0 million (previous year: € 938.0 million).

Of this growth in revenue, € 42.0 million stems from consolidation effects (first-time consolidation of Universitätsklinikum Gießen und Marburg GmbH from 1 February 2006 and of Kreiskrankenhaus Köthen from 1 April 2007) and € 26.9 million (2.9%) from organic growth.

Compared with the first half of 2006, net consolidated profit rose by € 7.0 million (+15.5%) to reach € 52.6 million (previous year: € 45.6 million) on the back of a gain (+20.6%) in EBITDA by € 21.3 million to € 124.9 million (previous year: € 103.6 million), the increase (+13.6%) in EBIT by € 9.7 million to € 80.8 million (previous year: € 71.1 million) and (+17.6%) in EBT by  € 11.0 to 73.4 million (previous year: € 62,5 million). This was in line with the expectations of the Group's management. Net consolidated profit in the first half corresponds to earnings per share of € 0.97 (previous year: € 0.84 adjusted).

Various legislation measures (increase in VAT to 19%, introduction of the reform impost for hospitals through revenue deduction from hospital remuneration, as well as continuation of revenue deductions to finance integrated care) as well as the impact of changes in doctors’ pay burdened the Group in the first half of 2007 to the tune of some € 19.5 million and were completely offset. “Various counter-measures already introduced in the previous year as part of the ten point programme have been successfully executed”, said Wolfgang Pföhler.

The positive performance was helped in particular by the complete elimination of losses at Universitätsklinikum Gießen und Marburg GmbH which had burdened consolidated earnings. In the first half of 2007, the university hospital reached break-even and generated a surplus of € 0.4 million (previous year: loss of € 5.6 million). Gerald Meder, deputy chairman of the Board of Management of RHÖN-KLINIKUM AG and chairman of the management of Universitätsklinikum Gießen und Marburg GmbH, explains in this regard: “The positive development of Universitätsklinikum Gießen und Marburg GmbH is now also showing up more and more clearly in the earnings figures. We are convinced we will be able to continue this positive trend in the second half.”

The first-time consolidation of Krankenhaus Köthen (264 beds) on 1 April 2007 burdened consolidated half-year earnings by € 0.5 million.

Driven by acquisitions and investments, the Company’s assets increased by € 47.7 million (+2.4%).

As at the reporting date of 30 June 2007, equity capital of € 751.9 million (31 December 2006: € 728.7 million) is reported, with dividend payments to shareholders and minority owners in the amount of € 29.5 already being included. The equity ratio rose slightly from 36.7% to 37.2%.

Overall, 98.2% of non-current assets is covered by equity and non-current liabilities. Net debt to banks rose since the last reporting date from € 439.0 million by € 53.7 million to € 492.7 million as at 30 June 2007. Not included in the calculation of net debt are marketable securities worth € 11.5 million.

Internal financing strength has increased significantly. Compared with the same period last year, cash flow rose by € 18.7 million or 23.9% to reach € 96.8 million.

“The Group continues to enjoy stable and sound financial structures”, stated Dietmar Pawlik, the Company’s CFO.

Of the investments amounting to € 121.5 million (previous year: € 276.3 million) in the first six months of 2007, € 46.9 million was attributable to investments funded from grants under the Hospital Financing Act (KHG) and deducted from total investments pursuant to the relevant provisions of IFRS.  In the further course of 2007 we have planned to invest a further amount of roughly € 145 million.

As at 30 June 2007, a total of 46 hospitals with 14,861 beds/places at a total of 35 sites in nine federal states were consolidated.

“To ensure better integration of outpatient and inpatient care, we have founded ten medical care centres (MVZ) since 2005. As we intend to fully exploit the many benefits from linking the MVZs to our hospitals – inter alia by shifting tasks to the outpatient area, avoiding redundant availability of large medical equipment units and higher pre- and post-inpatient quality in diagnosis and therapy –, the establishment of further new MVZs will follow”, explained the chairman of the Board of Management. For the further course of financial year 2007, commissionings with 23 doctor’s practices are planned at a total of seven sites.

In the first six months a total of 782,718 patients (up by 105,103 patients / +15.5%; previous year: 677,615) were treated in the Group’s hospitals and MVZs. Of this increase, outpatient treatments account for roughly 85.3%. After deducting consolidation effects (Universitätsklinikum Gießen und Marburg GmbH, Krankenhaus Köthen and first-time inclusions at the MVZs), this leaves organic growth in patient numbers of 21,707 patients or 3.2%. This growth is distributed nearly uniformly over the entire Group.

With effect from 1 January 2007 a total of ten service companies were started within the Group for provision of infrastructural services (including cleaning, catering, facility management services). With these further price reductions are being sought through competition within the Group.

At 30 June 2007, the Group had 31,844 employees (31 December 2006: 30,409). The newly consolidated facility in Köthen added 396 new employees. By 30 June 2007, following the integration of ten service companies, the Group took over a total of 1,558 employees from external service companies that had previously served the Group. The hospitals consolidated at the end of 2006 witnessed a slight decline in staff numbers (-519).

“Now that the legislative process for the corporate tax reform in Germany is about to be concluded, we assume that income tax rates will be lowered. RHÖN-KLINIKUM AG will benefit from lower corporate tax rates, the specific extent of which we will make known after publication of the revised corporation tax act”, said Wolfgang Pföhler.

“Based on the current framework conditions, we confirm our revenue forecast for full-year 2007 of € 2 billion and our earnings forecast of € 102 million. With new ideas and business models for high-quality, generalised and affordable healthcare we will further expand our lead in innovation and opinion on the hospital market”, said Pföhler in conclusion.