Care’s Q1 2020 net profit above estimates: Aljazira Cap

National Medical Care Co.’s (Care) Q1 2020 net income of SAR 33.2 million is above Aljazira Capital’s and consensus estimate of SAR 27.7 million and SAR 21 million respectively, the brokerage firm said in an earnings review.

Aljazira Capital expected COVID-19 to adversely impact the company’s outpatient revenues, as well as the overall financials in fiscal year 2020.

In the medium term, improvement in margins through cost-control measures, revenue growth through capacity addition at CNH, and benefits accruing from NMC Health’s expertise are expected to be the key drivers of the company’s growth.

The brokerage firm added that a high percentage of receivables from government and semi-government entities (72% of receivables in FY19) remain a major concern for the company.

Aljazira Capital upgraded its recommendation to cautious “Overweight” on Care with target price of SAR 58.60 per share.