Interim Report for the Third Quarter of 2017: RHÖN-KLINIKUM AG on the Right Track - Action Plan for Improving Profitability Successfully Commenced - Forecast for 2017 Confirmed

(lifePR) ( Bad Neustadt a.d. Saale, )
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- 208,703 patients treated
- Revenues amount to Euro 304.0 million
- EBITDA stands at Euro 27.4 million
- Outlook for 2017: Revenues between Euro 1.20 billion and Euro 1.23 billion; EBITDA between Euro 85 million and Euro 105 million

RHÖN-KLINIKUM AG, one of the largest healthcare providers in Germany, treated 3.7 percent more patients in the third quarter of the current financial year than in the same quarter of last year. Revenues rose by 3.2 percent to Euro 304.0 million (previous year: Euro 294.7 million). Despite this positive development earnings before interest, taxes, depreciation and amortisation (EBITDA) stand slightly lower at Euro 27.4 million (previous year: Euro 28.1 million).

RHÖN-KLINIKUM AG CEO Stephan Holzinger showed fighting spirit for the coming months: “We shall continue to tackle the tasks ahead of us in a resolute manner in order to improve our profitability. In July we developed an extensive action plan with clear areas of responsibility and a tight schedule. We shall put this action plan into practice throughout the corporate group and expect to see initial operative improvements in 2018 already.”

The many objections by the Medical Review Board of the Statutory Health Insurance Funds (Medizinischer Dienst der Krankenversicherungen – MDK) which either considerably delay or even refuse remuneration for services rendered and therefore ultimately reduce earnings are contrasted by the hospital group’s package of measures: rigorous trainee programmes, documentation and the use of intelligent software to reduce the number of such objections and thus gradually increase revenues.

Furthermore the cost-effectiveness of all the major maintenance agreements for our hospitals is currently under review, the volume of material purchases will be bundled in order to benefit from economies of scale and the range of materials used is being scaled down to an appropriate amount. On the medical side the occupancy in complex core areas (e.g. intermediate care wards) is also being analysed and optimised in order to reduce inappropriate occupancy in costly areas.

“As well as the necessary improvement of our operative business we still have our sights firmly on our strategic challenges, expanding the RHÖN campus as a business model to provide excellent medical care in rural areas and digitalising our services and processes. The company is well-equipped in this regard and on schedule,” Holzinger stated.

The innovative RHÖN campus concept is directed towards eliminating the hitherto hard boundary between in-patient and out-patient medical services and will combine the various services for our patients at one single site. State-of-the-art digital instruments are used here – both for the benefit of patients as well as employees. The hospital group sees considerable potential here to position itself as a provider of full-service healthcare and as a leading innovator in the healthcare market. The new campus in Bad Neustadt will open at the end of 2018 including a record amount of digitalisation.

Outlook

The company confirms its forecast for the current financial year of 2017 and expects revenues of between Euro 1.20 billion and Euro 1.23 billion and earnings before interest, taxes, depreciation and amortisation (EBITDA) of between Euro 85 million and Euro 105 million. This includes negative effects in a low two-digit million figure due to additional expense from digitalising medical processes and one-off burdens from group restructuring. We also currently assume that we shall be able to conclude the contractual settlement of the separate accounting for the Universities of Giessen and Marburg in the fourth quarter of 2017. We expect EBITDA to be within the upper half of the range when full legal ratification takes place.
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