Naba Alsaha posts strong profit, revenue growth in H1 2022, eyes higher market share: CEO

Nathir Al-Jishi CEO of Naba Alsaha Medical Services Co.

Naba Alsaha Medical Services Co. (NAMS) reported a 23.6% rise year-on-year (YoY) in net profit for the first half of 2022, CEO Nathir Al-Jishi told Argaam in an exclusive interview.

The company recorded a significant rise of 13% and 28% YoY in H1 2022 revenue and gross profit, respectively, backed by inpatient revenue and outpatient clinics.

NAMS will open a new pharmacy near Riyadh’s hospital, Al-Jishi noted, adding that the company is studying to open new branches in other neighborhoods.

The company also seeks expansion in the non-medical operation field by providing services of medical maintenance, general cleaning of health facilities and other medical complexes.

NAMS currently eyes a higher market share in the services market, leveraging the Kingdom’s strong growth in line with Vision 2030, which shows unlimited support for investment to ensure diversification of its income sources through business expansion and quality improvement.

Here’s the full interview with Al-Jishi:

Q: Can you give us an insight into Naba Alsaha’s core activities and their contribution to revenue?

A: The company’s core activities include operating in medical services provision through Alzahra General Hospital and Manarat Al Haramain Pharmacy. It also operates the maintenance and contracting branches. These departments have various contributions to the company’s revenue. Alzahra General Hospital contributed 92.3%, or SAR 108.6 million, to Naba Alsaha’s total revenue in 2021. Manarat Al Haramain accounted for 7.1%, or SAR 9.1 million, of the annual revenue, which amounted to SAR 117.7 million.

Q: What about the healthcare services provided by Alzahra General Hospital, its bed capacity and number of clinics?

A: Al Zahra General Hospital provides medical care services, including general and endoscopic surgery, cardiology, ophthalmology, adult intensive care, extended care, orthopedics, urology, internal medicine, endoscopy, pediatrics and neonatology, pediatric and neonatal intensive care, respiratory therapy, ENT, neurosurgery, physical therapy, obstetrics, gynecology, radiology, and emergency. These services are provided through 40 clinics in the 125-bed hospital.

Q: Naba Alsaha owns 20% of Eyadat Holding Co. in Bahrain. What about the associate’s contribution to the company’s profit?

A: The associate company has not yet contributed to Naba Alsaha’s profit. Eyadat will open its first project, Evexia day surgery clinics in Bahrain, in early 2023.

Q: As the company is in process of IPO, were Naba Alsaha shares traded in any market inside or outside the Kingdom?

A: The company’s shares have never been traded in Saudi Arabia or abroad before the current offering. Naba Alsaha applied to the Saudi Capital Market Authority (CMA) to register and list its shares on Nomu - Parallel Market. Its prospectus and other documents were also approved by the market regulator and other competent authorities. Naba Alsaha shares are expected to begin trading on Nomu soon after completing the share allocation and refund process. Qualified investors, who meet the CMA conditions, inside or outside the Kingdom, will start trading the company’s shares. Potential investors should read the “Important Notice” and “Risk Factors” sections in Naba Alsaha’s prospectus before taking any decision.

Q: How was the company’s financial performance in 2020 – 2021 and H1 2022 in terms of revenue and net profit?

A: The company recorded a 23.6% increase YoY in H1 2022 net profit. In addition, operating profit grew by 26.6% compared to the same period of the previous year, mainly due to the 12.6% growth in revenue.

In 2021, the firm’s revenue rose by 1.73% YoY. Meanwhile, revenue and gross profit grew by 13% and 28%, respectively, during the first six months of 2021.

Q: What about the revenue growth drivers in 2022?

A: The revenue growth was triggered by a rise of SAR 4 million in revenue of the inpatients department to SAR 42.2 million in H1 2022, compared with SAR 38.2 million a year earlier. In addition, income from outpatient clinics rose by SAR 3 million to SAR 20.7 million during the six-month period, from SAR 17.7 million a year before.

Q: Has the company recorded an increase in net profit in 2022?

A: Yes, the company's net profit in the first half of 2022 increased by 23.6% YoY, backed by its current basic facilities, which include Alzahra General Hospital and Manarat Al-Haramain Pharmacy.

Q: Any updates about the new hospital in Riyadh? What about the expected dates of its construction and completion? And what are the healthcare services to be provided?

A: The company started the groundwork, and the project is expected to be completed within four years. As for the healthcare services, the hospital will provide a number of specialties including, but not limited to, general surgery, internal medicine, dentistry, pediatrics, otolaryngology, orthopedics, obstetrics and gynecology. The hospital will provide these services through 80 clinics, with a capacity of 180 beds. The project will span 9,000 square meters.

Q: Do you have a plan to expand Manarat Al Haramain through establishing other branches, and expand services to include other fields?

A: Yes, the company will open a pharmacy next to the hospital in Riyadh. We are mulling new branches in other neighborhoods. In addition, we seek to expand in the field of non-medical operation by providing medical maintenance services, as well as cleaning and general maintenance of health facilities and other medical complexes, in accordance with the highest quality standards, benefiting from our 36 years of experience.

Q: Is the company working on certain goals currently?

A: We currently aim to increase our share in the services market by tapping into the Kingdom’s strong economic growth, in line with Vision 2030 that supports unlimited investment. The company seeks to develop and diversify its sources of income through business expansion and quality improvement, which mainly includes investing in national human cadres.