Burjeel net profit soars 52.4% in 2023

Healthcare groups revenue grows 15.6% to Dh4.5 billion


Somshankar Bandyopadhyay

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Published: Fri 8 Mar 2024, 12:39 PM

Last updated: Sun 10 Mar 2024, 6:10 PM

Burjeel Holdings PLC, a leading super-specialty healthcare services provider in MENA listed on the Abu Dhabi Securities Exchange, has announced its financial results for the 12-month period ending December 21, 2023.

Net profit rose by 52.4 per cent to Dh540 million, reflecting robust top-line growth and finance costs optimization. Revenue grew by 15.6 per cent to Dh4.5 billion, driven by higher patient footfall coupled with stronger patient yield. EBITDA1 reached Dh1.0 billion, an increase of 17.7 per cent, reflecting the ramp-up of growth assets.

Dr Shamsheer Vayalil, Founder and Non-Executive Chairman of Burjeel Holdings, commented: “Burjeel is playing an increasing role in these improvements by providing world-class healthcare for the Gulf. During the year, we continued to form and nurture enduring partnerships with the world’s leading institutions, research organizations, and medical practitioners. These partnerships are vital in accelerating the development of complex healthcare in fields such as oncology, transplants, genetics, fetal medicine, neuroscience, sports medicine and advanced rehab.”

John Sunil, Chief Executive Officer of Burjeel Holdings
John Sunil, Chief Executive Officer of Burjeel Holdings

John Sunil, Chief Executive Officer of Burjeel Holdings, said: Our well-invested state-of-the-art infrastructure with high-growth assets and our capability to onboard highly qualified doctors and world-renowned consultants have enhanced patients’ trust in Burjeel Holdings. The Group remains uniquely positioned to deliver on its value-creation strategy of increasing asset utilization, patient yield and operational efficiencies, while extending its brands across the region.”

Excerpts from an interview:

1. Can you shed some light on the factors that have contributed to the 2023 performance?

Burjeel Holdings made remarkable progress on its strategic ambitions to ramp up the Group’s high-growth assets, expand its healthcare infrastructure, and drive patient yield through the provision of highly specialized complex care. We maintained our focus on expanding our medical network and enhancing operational efficiency through economies of scale and continued digitization. Furthermore, with a substantial in-patient private market share of 19 per cent in the UAE, Burjeel has consolidated its position in the Emirates’ healthcare system, particularly in areas of highly complex healthcare.

Our network served more than 6 million patients in 2023, reflecting patients’ trust in our healthcare system and the ability to add new services to increase patient footfall. Our total patient footfall saw substantial increases of 9 per cent, primarily due to our investment in super-specialties and the ability to drive cross-group referrals. Bed occupancy reached 61per cent during 2023, reflecting both impressive improvement in utilization and the significant untapped capacity across Burjeel’s 16 hospitals.

Our flagship facility, BMC — Burjeel Medical City, contributed 24 per cent to total hospital segment revenue in 2023. The continued ramp-up of BMC towards the end of 2023 drove a sharp increase in in-patient and outpatient footfall due to the introduction and rapid ramp-up of new services.

2. What are Bujeel’s plans for 2024?

Over the next two years, we plan to open one hospital in Dubai, day surgery centers in the Al Ain and Al Dhafra regions, and a medical center in Abu Dhabi. To continue ramping up quickly, we plan to add 32 new in-patient specialized beds across mature assets in 2024.

In addition to four premier physiotherapy centres opened in Riyadh in 2023, Burjeel in March 2024 launched eight new centers in Riyadh, Jeddah, Dammam, Al Khobar, and Yanbu, significantly scaling its geographical footprint across the Kingdom. Burjeel plans to grow its PhysioTherabia offering with a target to open 60 centers by the end of 2025. Burjeel’s expansion plan over the next two years also includes launching two specialized day surgery centers in Riyadh, which will be expanded across the Kingdom to tap into the increasing demand for world-class medical care among resident and tourist populations in KSA.

3. How did Burjeel Group’s operating margin perform in 2023, and what initiatives were implemented to improve efficiency?

The company delivered an impressive net profit growth rate and set a new record in profitability in 2023. The Group posted a net profit of Dh540 million, 52 per cent up from the prior year, and the net profit margin increased to 12 per cent. EBITDA increased by 18 per cent YoY to reach Dh1 billion, an EBITDA margin of 23 per cent.

In 2023, revenue and EBITDA in the segment increased by 16 per cent and 27 per cent, respectively, driven by growing in-patient footfall and increased patient yields.

We have partnered with national and international institutions to train and improve specialized nursing skills. Additionally, data analytics and AI-led solutions are being harnessed to optimize patient care processes and enhance operational efficiency.

We are implementing Oracle’s Electronic Medical Record (EMR) system to deliver transformative clinical, commercial, and operational efficiencies across Burjeel’s healthcare facilities. EMR will enable improved digital outreach, process automation, and the better use of patient insights to drive excellent outcomes.

We also announced a new strategic partnership with e& enterprise, bringing advanced technology into the healthcare sector and transforming how we deliver patient care.

4. How did Burjeel Group invest in research and development or new technologies in 2023, and how do you anticipate these investments will impact future financial performance?

Burjeel Holdings has continued rapidly expanding its partnerships with world-class specialists and organizations. BMC opened the Paley Middle East Clinic, specializing in orthopedic care for musculoskeletal conditions and complex procedures. We also began our affiliation with Northwell Health, the largest healthcare provider in New York State, to launch a highly advanced Neuroscience Institute in Abu Dhabi. Furthermore, we launched the Advanced Gynecology Institute at the BMC, collaborating with the Franco-European Multidisciplinary Institute of Endometriosis Academy (IFEM Endo).

From deploying Oracle Cerner for healthcare management to leveraging robotics for precision surgery, we are at the forefront of technological innovation. Additionally, data analytics and AI-led solutions are being harnessed to optimize patient care processes and enhance operational efficiency.

5. Can you elaborate on Burjeel Group’s cash flow position in 2023 and any strategies employed to optimize cash flow?

The Group benefited from a notable 58 per cent growth in cash flow from operating activities in 2023, driven by substantial EBITDA growth and optimization of working capital. The Company spent Dh113 million on maintenance CAPEX and Dh65 million on digital transformation and expansion projects in 2023. Despite substantial CAPEX, the free cash flow conversion improved to 52 per cent, up from 42 per cent in the prior year.

6. Looking ahead, what are the key financial goals or priorities for Burjeel Group in the coming year, and what strategies will be implemented to achieve them?

Looking ahead to 2024, we will continue to develop our integrated network in the UAE, combined with capex-light expansion in KSA and zero-capex O&M contracts across the MENA region.

From 2024 to 2025, our UAE network will increase by one Burjeel Hospital in Dubai, Burjeel Day Surgery Centers in the Al Ain and Al Dhafra regions, and one Burjeel Medical Center in Abu Dhabi.

In KSA, we expect to end 2025 with 60 PhysioTherabia centers. We are exploring additional opportunities to expand our presence further in the Kingdom, including initially launching two Day Surgery Centers in Riyadh by 2025, with further expansion planned.

We upgrade our mid-term revenue outlook. We expect revenue growth in 2024 to be mid-teens, normalizing to low double-digit percentages by 2027. EBITDA margin improvement will continue, and we hope to expand gradually to the high-20s by 2027.

Our team considers that our integrated healthcare network and balanced, prudent, and CAPEX-light growth strategy will continue to deliver above-expected returns for our shareholders.

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