RIYADH: The revenues of healthcare companies listed on the Saudi financial market achieved their highest growth rate in four years, continuing to record unprecedented levels by the end of last year.
This coincided with companies continuing to open new hospitals, which was met with an increase in patient visits and higher occupancy rates.
Healthcare companies’ revenues reached approximately SR33.1 billion ($8.81 billion), with an annual growth of 17.6 percent compared to 13.4 percent in 2024.
The companies covered in the report, listed on the main market, are: Saudi German Health, Al-Habib Medical Services Group, and SMC Healthcare, as well as Dallah Health, Mouwasat Hospital, and Fakeeh Care Group. Other listed companies include National Medical Care, Almoosa Health Group, and Al-Hammadi Holding.
However, this growth was not sufficient to improve margins, particularly gross income margins, due to a slowdown in net profits. This is attributed to rising operational costs at new hospitals, in addition to a decline in revenue per patient.
Profitability slowdown continues
By the end of last year, healthcare companies achieved net profits of SR5.4 billion, representing record earnings. Nevertheless, profits grew at their slowest rate in a long time, increasing by 9.5 percent, compared to 17.6 percent in the previous year.
This primarily highlights the impact of expansion costs, in addition to the decline in average revenue per patient and other factors related to debt costs, provisions for receivables, or non-recurring items in 2024.
All healthcare companies saw their profits grow last year, with the exception of Al-Hammadi Holding, which recorded a decline of about 29 percent. This was affected by the recording of non-recurring gains during 2024, as well as an increase in expected credit loss provisions.
Almoosa Health Group topped the growth after successfully doubling its profitability to SR200 million, supported by expanded operational capacity. SMC and Mouwasat also recorded high profit growth rates.
In contrast, the profits of HMG grew by about 3.6 percent to SR2.3 billion, marking the lowest growth since the company’s listing on the Saudi market in 2019, impacted by expansion costs and a decline in average revenue per patient.
Revenue per patient declines 5%
Based on disclosures from six out of the 10 companies, average revenue per patient declined during the past year by about 5.3 percent, despite the number of patients growing by approximately 25 percent.
This decline can be explained by increased competition due to new expansions, pressure from insurance companies on service pricing through renegotiations, in addition to a trend among several companies to focus on clinics, which involve simpler cases compared to high-cost admissions and surgeries.
Al-Habib Medical Services Group is the largest healthcare company in terms of patient numbers, reaching approximately 9.5 million patients during the past year, a growth of 27 percent. However, average revenue per patient declined by 4 percent to approximately SR1,450.
Cash distributions
The boards of directors of healthcare companies decided to distribute about SR3 billion for the past year, an increase of 10 percent over the previous year, with the companies’ cash yield remaining at around 2 percent.
HMG announced a distribution of SR1.69 billion for the past year, equivalent to 70 percent of profits, exceeding the distributions of the rest of the healthcare companies combined.
The cash yield for HMG remains at 1.9 percent, slightly below the average for healthcare companies, while the yield for SMC is the highest at 6.2 percent due to exceptional distributions.
