Despite a jump in sales, Romania’s largest private medical operator, Medlife, has reported a slump in first quarter profits.
Thanks to an increase in foreign exchange expenses, profits decreased by 46% to L2.4m (US$557,000). Revenues increased by 31.1% to L233m.
The highlight of the quarter was that at the end of January, Medlife announced its first international transaction: the acquisition of 51% of leading Hungarian medical provider Rózsakert Medical Centre Group.
‘We are very pleased with the financial results, and the decline in indebtedness encourages us to turn to shareholders to request the increase of borrowings to resume acquisitions in Romania, Hungary, but also in the neighboring countries where we see a significant growth market,’ said president and chief executive officer Mihai Marcu.
Marcu went onto say that Medlife is currently having discussions with two to three operators from Romania and Hungary which he hopes will turn into transactions in the second half of the year or early next year. ‘After the successful transaction in Hungary, we think it is a good time to prospect and test the neighboring markets deeper,’ he added.
Medlife certainly has the war chest for further transactions. At the beginning of November it signed a new €66 million (US$75 million) syndicated credit facility with Banca Comercială Română, Raiffeisen Bank, BRD Groupe Société Générale and Banca Transilvania.
On the Bucharest Stock Exchange, Medlife shares trading down slightly on the results. The group raised L230 million at L26 per share in December 2016. They were last seen at L28.50.