MD Medical Group Investments Plc: MD Medical Group maintains strong EBITDA margin

5 September 2022 MD Medical Group Investments Plc (MD Medical Group, MDMG, the Group or the Company LSE and MOEX: MDMG), a leading Russian private healthcare provider, announces its audited consolidated financial statements for the 6 months ended 30 June 2022 under International Financial Reporting Standards (IFRS).

Key financial highlights for 1H 2022:

  • Total revenue increased by 1.3% year-on-year (y-o-y) to RUB 12,159 mln.
  • EBITDA went down by 5.8% y-o-y to RUB 3,559 mln. EBITDA margin dropped by 2.2 p.p. y-o-y to 29.3%.
  • Adjusted Net profit decreased by 9.4% y-o-y to RUB 2,393 mln. Adjusted Net profit margin was 19.7%.
  • Operational cash flow declined by 15.9% y-o-y to RUB 3,132 mln.
  • Capex amounted to RUB 762 mln, up 7.0% y-o-y. Investments were mainly allocated towards the launch of new projects: MD Lakhta in St Petersburg, MD Tyumen-2 and an out-patient clinic in Yekaterinburg.
  • As at 30 June 2022, the Groups Net Cash position stood at RUB 85 mln. The Net Cash position to EBITDA ratio was 0.0x.

Key operational highlights for 1H 2022[1]:

  • Total out-patient treatments decreased slightly, by 2.1% y-o-y, to 878,458.
  • Total in-patient treatments decreased by 7.4% y-o-y to 70,937.
  • Total IVF cycles increased by 0.8% y-o-y to 8,223.
  • Total deliveries increased by 2.0% y-o-y to 4,109.

Key events during 1H 2022 and after the reporting period:

  • Hospital launched in St Petersburg. In January 2022, MD Medical Group opened a new multi-functional hospital MD Lakhta in St Petersburg. Its core business is womens and childrens healthcare with a focus on childbirth and gynaecological surgery. Total investments in the project amounted to circa RUB 2 bln.
  • Hospital launched in Tyumen. In February 2022, MD Medical Group launched a new multi-disciplinary hospital MD Tyumen-2. Total investments in the project amounted to approximately RUB 1 bln.
  • Novosibirsk Centre for Reproductive Medicine renovated. On 16 June 2022, MD Medical Group completed the renovation of its medical centre in Novosibirsk, increasing its capacity to 1,000 IVF cycles per year. Total investments in the project amounted to some RUB 23 mln.
  • Medical centre opened in Moscow. On 23 June 2022, MD Medical Group opened a new out-patient medical centre, Mother & Child Butovo, with a capacity of 30,000 visits per year. Total investments in the project amounted to circa RUB 16 mln.
  • MGIMO Med University launched. On 1 September 2022, MD Medical Group in cooperation with the Moscow State Institute of International Relations (MGIMO) opened medical university MGIMO Med. 
  • VTB loan repaid early. In Q3 2022, MD Medical Group repaid the loan it had taken out from VTB in 2018 by settling all outstanding obligations in the amount of RUB 2,166 mln ahead of schedule.

1H 2022 Financial Highlights

RUB mln








Hospitals in Moscow




Hospitals in regions




Out-patient clinics in Moscow and MR




Out-patient clinics in regions




Managing company and other




Gross profit




Gross profit margin,%








EBITDA margin,%








EBIT margin,%



(12.9 p.p.)

FX loss




Net finance expenses




Profit before tax








Net income




Adjusted Net income




Adjusted Net income margin,%



(2.7 p.p.)


In 1H 2022, MD Medical Groups total Revenue increased by 1.3% y-o-y to RUB 12,159 mln. The growth was mainly driven by a stable demand for IVF in Moscow and the Moscow Region (revenue from IVF up 26.4% y-o-y), on-target capacity utilisation rates at regional hospitals (revenue up 12.4% y-o-y) amid a post-COVID recovery in demand for medical services, and strong performance of new projects  MD Lakhta and the medical cluster in Tyumen.

Revenue from medical services not related to womens and childrens health accounted for 48.9% of total revenue, down from 51.3% in 1H 2021.

1H 2022 Key Operating Expenses

RUB mln




Payroll and Social contributions




as % of total Revenue




Material expenses




as % of total Revenue




Medical services expenses




as % of total Revenue




Functional expenses[2]




as % of total Revenue




Gross profit

Gross profit in 1H 2022 declined by a marginal 0.8% y-o-y to RUB 4,514 mln. Gross profit margin decreased by 0.8 p.p. y-o-y to 37.1% primarily due to a rise in personnel costs as a result of business expansion associated with the launch of MD Lakhta and MD Tyumen-2.

Impact of key expenses

In the reporting period, the Company’s key expenses remained tightly controlled and slightly increased by 1.8 p.p. y-o-y as a percentage of revenue (to 65.2%) amid the growth of personnel costs and functional expenses.

The share of personnel costs grew by 3.2 p.p. y-o-y as a percentage of Revenue (to 42.0%) mainly due to a decline in COVID-19 diagnostic and treatment services (resulting from a higher share of fixed costs) and the opening of new facilities (MD Lakhta and MD Tyumen-2) and their gradual ramp-up to design capacity.

The share of materials expenses decreased by 1.6 p.p. y-o-y as a percentage of Revenue (to 20.5%) on the back of a reduction in material-intensive services in the Company’s portfolio, including therapy related to COVID-19.

The share of medical services expenses declined by 0.2 p.p. y-o-y as a percentage of Revenue (to 1.2%) due to the gradual vertical integration of business processes, including the opening of the Companys own laboratory and data processing centre.

The share of functional expenses increased by 0.3 p.p. y-o-y as a percentage of Revenue (to 1.4%), driven by the growth in marketing expenses amid the Groups business expansion.


EBITDA declined by 5.8% y-o-y and amounted to RUB 3,559 mln in 1H 2022. EBITDA margin decreased by 2.2 p.p. y-o-y to 29.3% due to a drop in revenue from COVID-19 diagnostic and treatment services.

Operating profit

Following impairment testing in 1H 2022, the Company recognised impairment of investments made in the previous periods, including fixed assets of the Ufa clinical hospital (opened in 2014) and goodwill of the Novokuznetsk out-patient clinic (acquired in 2015) on the back of an unfavourable macro environment. In addition, in the reporting period, the Group recognised a RUB 85 mln impairment of previously acquired construction documents due to the change in plans to build a clinic in St Petersburg. Total impairment recognised in 1H 2022 was RUB 1,287 mln.

As a result, Operating profit dropped by 51.6% y-o-y to RUB 1,442 mln in 1H 2022, with an Operating profit margin of 11.9%.

Adjusted Net profit

In 1H 2022, FX loss amounted to RUB 198 mln. The 4.7x growth as at the end of the reporting period was attributable to a 31.1% rouble appreciation against the US dollar as compared to the beginning of the year.

As a result, the Company’s Adjusted Net profit decreased by 9.4% y-o-y to RUB 2,393 mln in 1H 2022. Adjusted Net profit margin dropped by 2.7 p.p. y-o-y to 19.7%.

Key cash flow statement figures

RUB mln




Operating cash flow before Working capital changes




Changes in Working capital








Cash from operating activities




Cash used in investing activities




Cash used in financing activities




Cash and cash equivalents increase




In 1H 2022, Operating cash flow before changes in working capital decreased by 7.6% y-o-y to RUB 3,552 mln as a result of the decline in EBITDA.

Working capital

RUB mln

June 30, 2022

December 31, 2021




Accounts receivable



Accounts payable



Contract liabilities



The Company has historically maintained negative Working capital as a source of additional financing. In 1H 2022, Working capital remained negative at RUB (1,829) mln and amounted to 7.5% of Revenue.

In the reporting period, Operational cash flow decreased by 15.9% y-o-y to RUB 3,132 mln, primarily due to the changes in Working capital caused by the update of medicine and consumable supply terms as suppliers switched from deferred payment by instalments to advance payment.

Cash used for investing activities, mainly consisting of capital expenditures and proceeds from short-term deposits, amounted to RUB 565 mln.

Total Capex increased by 7.0% y-o-y to RUB 762 mln in 1H 2022. The growth was driven by the completion of construction at MD Lakhta, MD Tyumen-2, and MD Lab test collection points.

In 1H 2022, cash outflows related to financing activities amounted to RUB 1,249 mln vs RUB 2,592 mln in 1H 2021. The decrease came in as the Company did not pay dividends for 2021.

As at 30 June 2022, net cash increased by RUB 1,115 mln to RUB 4,704 mln.

Debt portfolio

RUB mln

June 30, 2022

December 31, 2021

Total debt



Short-term debt



Long-term debt



Cash and cash equivalents



Net debt / (Net Cash position)



Net debt/(Net cash position) / EBITDA



The Group’s debt decreased by 16.2% y-o-y to RUB 4,619 mln as at the end of 1H 2022 mainly due to the repayment of RUB 858 mln towards the principal balance. Cash balance grew by 31.1% to RUB 4,704 mln as at 30 June 2022 vs RUB 3,590 mln as at 31 December 2021.

As at 30 June 2022, the Companys Net cash position amounted to RUB 85 mln. The Company’s debt is fully denominated in roubles. The Net Cash position to EBITDA ratio as at 30 June 2022 was 0.0x.


  1. Minor deviations in the calculation of totals, subtotals and/or percent changes are due to rounding
  2. The Groups consolidated financial statements are available on the Groups website:


For further information please contact:


Battalova Renata

Investor Relations Director

Tel.: +7 917 294 28 82

About MD Medical Group

MD Medical Group is a leading provider in the Russian private healthcare service market. The Company manages 50 modern healthcare facilities, including 10 hospitals and 40 out-patient clinics in 25 regions of Russia. In 2021, MD Medical Group’s revenue amounted to RUB 25.2 bln while EBITDA amounted to RUB 8.3 bln. The Company’s GDRs are traded on London Stock Exchange (LSE: MDMG) and Moscow Exchange (MOEX: MDMG).

Forward-Looking Statements:

This press release contains forward-looking statements, which are based on the Companys current expectations and assumptions and may involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. The forward-looking statements contained in this press release are based on past trends or activities and should not be taken that such trends or activities will continue in the future. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a number of variables which could cause actual results or trends to differ materially, including, but not limited to: conditions in the market, market position of the Company, earnings, financial position, cash flows, return on capital and operating margins, anticipated investments and economic conditions; the Companys ability to obtain capital/additional finance; a reduction in demand by customers; an increase in competition; an unexpected decline in revenue or profitability; legislative, fiscal and regulatory developments, including, but not limited to, changes in environmental and health and safety regulations; exchange rate fluctuations; retention of senior management; the maintenance of labour relations; fluctuations in the cost of input costs; and operating and financial restrictions as a result of financing arrangements. No statement in this press release is intended to constitute a profit forecast, nor should any statements be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for the Company. Each forward-looking statement relates only as of the date of the particular statement.

Use of non-IFRS indicators

As part of disclosing the Groups financial results under IFRS, we use the following non-IFRS indicator: Adjusted net profit.

We believe Adjusted Net profit to be instrumental for investors and analysts in assessing the core operating performance of the Company and analysing comparable results for different periods, excluding one-off gains or losses.

Adjusted Net profit means net profit under IFRS plus (1) impairment loss on goodwill; (2) impairment loss on fixed assets; (3) impairment loss on work in progress; minus (4) other income from property tax recovery.

Impairment loss on goodwill and fixed assets

As macro environment became more challenging in 1H 2022, the Group recognised a one-off RUB 201 mln impairment loss on goodwill of the Novokuznetsk out-patient clinic and a one-off RUB 1,000 mln impairment loss on fixed assets of the Ufa clinical hospital (the excess of the fair value of the goodwill / fixed assets over their book value).

Impairment loss on work in progress

Adjusted net profit for 1H 2022 does not include a RUB 85 mln impairment loss on work in progress related to construction documents and the change in the Group’s plans to build a clinic in St Petersburg.

Other income from property tax recovery

Adjusted net profit for 1H 2021 does not include other income from property tax recovery in the amount of RUB 45 mln.