NMC Health expects UAE, Oman operations to continue in 2021, after sale of non-core assets

UAE-based NMC Healthcare, which was forced into administration last year, reported that revenues for the group dropped 6 per cent in 2020 to $1.53bn, down from $1.63bn in 2019.

Meanwhile gross revenues for NMC’s UAE and Oman operations reached $1.12bn, down 6.8 per cent from 2019.

“Despite difficult circumstances due to Covid-19, gross revenues for the NMC’s UAE and Oman business of $1.12bn are 11 per cent ahead of the business plan, with tighter cost controls and the acceleration of performance improvement initiatives resulting in EBITDA of $87.6m, 448 per cent ahead of the business plan (budgeted $16m),” a statement said.

The company’s EBITDA for the UAE and Oman business is down 12.5 per cent compared to $101m in 2019.

Although revenues in the UAE and Oman were impacted by the pandemic between March and July 2020, they recovered during the second half of the year, especially within the long term  and home care (Provita) and IVF segments, the statement said. Hospitals and cosmetics delivered revenue broadly in-line with 2019.

NMC is undertaking a complete restructuring of its balance sheet following the discovery of significant fraud and debt well in excess of the previous disclosures.

It entered into the ADGM process on September 27, 2020 to seek protection from the court against creditor action so as to address its liabilities. Richard Fleming and Ben Cairns were appointed joint administrators.

“NMC Group in 2021 is expected to be comprised of operations in the UAE and Oman, following the anticipated sale of non-core assets in early 2021,” the statement said.

On December 21, NMC announced they had agreed to sell their subsidiary Eugin (Luarmia and Boston IVF) to Fresenius Helios for an enterprise value of EUR430m (approximately $525m). The deal is expected to close during the first half of 2021 following completion of necessary competition filings.

Meanwhile NMC’s financial advisers, Perella Weinberg Partners and Resonance Capital also recently launched a sale process to explore potential interest in its core business in the UAE and Oman.

The sale process will be run in parallel with the ongoing restructuring discussions with NMC’s lenders.

Following receipt of indicative offers from qualified bidders, NMC together with its key stakeholders will evaluate those bids alongside the proposed plan of reorganisation, the statement said.

As of December 31, 2020, NMC had $78.9m of available cash on hand together with undrawn credit facilities of $167.3m available under its administration financing facility.

Looking ahead, NMC forecasts gross revenue growth of 6 per cent in 2021 for the UAE and Oman business with estimated EBITDA of $163m.

Michael Davis, CEO of the group said: “We entered 2021 with a stable financial position and an operating platform that will enable us to deliver full value to all our stakeholders. Given this performance and resilience, we are growing more confident about our business and competitive position.”