“The market of medical services paid for by subscribers or by companies is worth around EUR250 million. In the last two years the market of private medical services has been very volatile. This year it flattened again. We rely on steady revenues from cash payers and from subscribers with sustainable growth,” Mihail Marcu said.
MedLife last year recorded a consolidated turnover at group level of around EUR59 million and for this year estimates it will reach EUR72-75 million. This makes MedLife the largest operator on the private medical services market.
“25-27% of the EUR59 million in total revenues of 2012 come from subscribers, 7% from the state and the rest are cash revenues,” the president of MedLife also said. He adds that at company level 5,000 clients make daily payments to MedLife.
According to ZF calculations, MedLife has around EUR1.8 million cash paying clients per year and revenues of almost EUR40 million from them.
The group operates a network of 9 hyperclinics in Bucharest and across Romania, eight test labs, six hospitals, three maternity hospitals, as well as general centers, a drugstore chain and others. MedLife will open “at least” two hyperclinics in Romania this year following investments of EUR3.5 million.
The company expects an EBITDA of EUR10 million this year, from EUR6 million last year.
“Unpredictability is very high in the healthcare system. We have emergency ordinances issued by the House [The National Health Insurance House – CNAS) and by the Health Ministry every week and things are going too fast for us to be able to make a prediction,” Marcu said.
In the Romanian health system EUR5.53 billion were spent last year from public funds, of CNAS, the Health Ministry and of the local authorities, according to ZF data. To this add private funds (for private services, private insurance and over-the-counter drugs), which can be estimated at around EUR1 billion.
“Stability is the most important thing. I think the shock that Romanian and foreign investors were dealt last summer [after the government fell and a political crisis ensued] was huge. For investors Romania was a black stain for six months. Now it’s a grey stain (…) Romania is out of the crisis, but nobody should think we will return to the [economic boom period] of 2007-2008,” Marcu said.
The Marcu family holds the majority stake in MedLife, but shareholders also include IFC, the private investment division of the World Bank and private equity firm SGAM.
ZF Live is broadcast from Monday to Friday from 10:00 on live.zf.ro. You can find recordings of previous shows on www.zf.ro
(English version by Daniela Stoican)