Medical subsidiary of Sistema sees revenue to US GAAP fall by 4% due to exchange rate
MOSCOW. Aug 21 (Interfax) - Medsi, a subsidiary of AFK Sistema , saw revenue to US GAAP fall by 3.8% to $141.6 million.
Medsi attributes the fall in earnings to the depreciation of the ruble against the dollar. The company's revenue in rubles demonstrated growth of 8.5% to 4.9 billion rubles.
The group's operating income before depreciation and amortization (OIBDA) increased 33.5% to $20.3 million. OIBDA margin amounted to 14.4%, which is 4.1 percentage points higher than in H1 2013.
Medsi's net profit was $19.4 million in H1 2014 against $0.4 million in the same period of last year. The significant growth in net profit is attributed to the use of a zero tax rate for profit, which has been available for medical organizations since 2012, if they observe a number of conditions. At the end of 2013, the group increased the number of clinics that use the zero tax rate for profit, which, as expected, led to a substantial decrease in taxes in 2014.
The size of the average check in H1 fell 5.4% in comparison with H1 of last year to $46.8, the number of visits increased by 2.4%.
Medsi's commercial and administrative expenses in the reporting period dropped 13.9% and amounted to $17.8 million. The share of commercial and administrative expenses as a percentage of revenue fell to 12.5% in comparison with 14% in H1 2013. These expenses fell due to the optimization of expenses on managerial staff, information technology and consultation services.
Medsi's capex in January-June increased by more than 14 times to $28.5 million from $2 million in H1 2013. The sharp growth of capex is connected with the implementation of a program for the reconstruction of existing clinics, clinical hospitals and sanatoriums to upgrade them to the segment of "business". Medsi began the construction of a new clinical and diagnostic center in Krasnaya Presnya, which is planned to be put into operation in 2015.
The group's total debt at the end of H1 2014 was $83.8 million, which is 6.6% more than the year before. Medsi's debt is completely denominated in rubles and 67% of the debt is long-term liabilities. At the end of H1, the group demonstrated net cash position of $32 million in comparison with net debt of $42.7 million in 2013.