UAE’s Burjeel Holdings in advanced stages to enter Saudi Arabia: CEO

Burjeel Holdings Group’s CEO John Sunil

UAE-based hospital operator Burjeel Holdings Group’s outlook for the company is positive for the remainder of the year, CEO John Sunil told Argaam in an interview.

Further, Burjeel Holdings will start implementing its cash dividend distribution policy starting this year, as promised in the company’s initial public offering (IPO) on the main market of the Abu Dhabi Securities Exchange (ADX) in 2022.

The company reached advanced stages in negotiations on the operation and management of several hospital assets in Saudi Arabia and is also exploring potential cooperation opportunities.

The following is Argaam's interview with Burjeel Holdings CEO:

Q: What is your view on the company's Q2 2023 and H1 2023 financials after achieving higher profits? What are the reasons for this rise?

A: Burjeel Holdings saw exceptional performance during H1 2023, reporting strong growth in net earnings, with significant operational and strategic progress.

Revenues for the six-month period increased by 14% year-on-year (YoY) to AED 2.2 billion, driven by accelerated growth in Q1 2023 revenue by 16% YoY, higher patient count and revenues. The total number of patients rose 11% YoY to 2.9 million. Bed occupancy grew 59% in H1 2023, compared to 50% a year earlier, with still significant opportunities for expansion of key assets driving growth.

Burjeel Holdings’ various business segments, including hospitals, medical centers, pharmacies and other services, continue to drive growth and boost profit margins. The hospitals segment remains the main contributor to the group's revenues, accounting for about 88% of the total during the period.

Q: In order to expand the scope of your services in the Kingdom, you announced last June the establishment of Integrated Medical Care Services Co. - a limited liability company in partnership with Leejam Sports Co. What is your comment on this new partnership?

A: Earlier this year, we started a strategic joint venture (JV) with Leejam to set up more than 60 physiotherapy, rehabilitation and healthcare centers in the Kingdom, inside and outside Leejam’s network. These centers were launched under the “PhysioTherabia” trademark to provide physiotherapy, rehabilitation, and healthcare services.

Through this partnership, we will benefit from Leejam's network and huge customer base, as well as the opportunity to enter the healthcare market with limited capital requirements. We are poised to take off strongly by leveraging Leejam's centers and their customer base, representing a key market for sports medicine and rehabilitation services.

The timeline for the implementation of this expansion is expected to extend over the next 24 months. Currently, three centers are ready to kick off, with the rest to open in 2024.

However, our ambitions go beyond this initial phase, with our belief that the capacity in the Kingdom will reach 100 clinics in the long term.

Looking ahead, I believe that the collaboration with Leejam may extend beyond the establishment of clinics. We are now discussing the possibility of expanding our partnerships, either through the Burjeel-Leejam JV or by exploring other operational and management opportunities in the Kingdom. Our partnership with Leejam is the first and most important step on our way to untapped opportunities in the Kingdom — but indeed not the last.

Q: Discussions from your end were announced for the operation and maintenance of a number of hospital assets in Saudi Arabia as well as separate potential partnerships to provide specialized medical care. Are there more details on this?

A: Over the years, Burjeel Holdings enjoyed a strong reputation as a trusted partner for managing and overseeing complex healthcare delivery facilities. This track record secured for us numerous invitations from government and non-government entities to manage their healthcare assets.

We cannot release any detailed information at the moment. However, we are in talks with a range of parties inside Saudi Arabia for possible partnerships.

We are currently studying options that align with our business model and achieve our strategic objectives. To be specific, we are interested in opportunities with limited capital requirements, which rely more on our expertise without significant capital expenditure.

Looking at the Kingdom's ambitious growth plans, we see a growing demand for healthcare capabilities and capacity.

Therefore, we entered advanced stages in negotiations on the operation and management of several hospital assets within the Kingdom. In addition, we are exploring potential cooperation opportunities aimed at providing specialized medical services that meet specific medical needs.

Burjeel Holdings is currently considering options to expand its business work, whether through partnership with the public sector, or by building its asset network. Our strategic position enables us to efficiently invest in the right opportunities, not only within Saudi Arabia, but in larger and wider prospects. This has been supported by a significant drop in net debt since the IPO in 2022.