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Romania's MedLife Group eyes neighbouring markets despite lower Q1 net profit

Romania's MedLife Group eyes neighbouring markets despite lower Q1 net profit MedLife

BUCHAREST (Romania), May 15 (SeeNews) - Romanian privately-owned medical services provider MedLife Group [BSE: M] said on Wednesday it is contemplating an expansion of its operatins on neighbouring markets, following a successful acquisition in Hungary earlier this year.

MedLife's net profit fell by 46% year-on-year in the first quarter of 2019, to 2.37 million lei ($559,400/497,700 euro), the company also said in a statement filed with the Bucharest Stock Exchange, citing preliminary results.

The decline was exclusively due to financial loss coming from other financial expenses in the amount of 6.3 million lei in the January-March period as compared to 300,000 lei in the like period a year earlier and by the IFRS 16 impact amounting to 1 million lei, it added.

Operating income rose by an annual 32% to 233 million lei, while operating expenses grew 31% on the year to 218 million lei in the first quarter of this year.

Turnover increased by an annual 31% to 231 million lei on the back of significant growth in all business lines, mainly clinics, hospitals, pharmacies and laboratories. MedLife's operating profit jumped by  an annual 56% to 15.04 million lei during the three month period.

"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 neighbouring countries where we see a significant growth market," Mihai Marcu, CEO and president of MedLife, said.

In January, MedLife acquired 51% interest in Hungary's Rozsakert Medical Center (RMC) Group - its first acquisition outside Romania. Since 2009, the company has opened or bought over 129 medical units.

"After the successful transaction in Hungary, we think it is a good time to prospect and test the neighbouring markets deeper. We currently have discussions with two-three operators from Romania and other two-three from Hungary and, in view of the specificity of this type of transaction, we hope that we will be able to return with good news to our shareholders in the second half of the year or early next year on some medium-sized transactions," Marcu added.

In addition to the expansion plans at national and international level, MedLife's strategy in the next period includes the development of digitization projects.

MedLife ended 2018 with a group consolidated pro-forma turnover of 804 million lei, up 29% compared to 2017.

If all the announced projects to shareholders are successfully implemented, there are premises to exceed the 200 million euro ($225 million) threshold in 2019, the company said.

MedLife shares traded flat at 28.6 lei on the Bucharest Stock Exchange as at 1144 CET on Wednesday.

(1 euro = 4.7615 lei)