Earnings Report /
Saudi Arabia

Dr Sulaiman Al Habib: Earnings Call Summary – Q2 22

  • In Q2 22, revenues grew by 15.0% yoy (+1.2% qoq) to SAR2.01bn

  • Group’s gross profit increased by 21.8% yoy in Q2 22

  • The group has declared a dividend of SAR301mn (equivalent to 0.86/share) for Q2 22

SNB Capital
14 August 2022
Published bySNB Capital

Below are the key highlights of Dr. Sulaiman Al Habib Medical Group's (HMG) Q2 22 earnings call.


  • In Q2 22, revenues grew by 15.0% yoy (+1.2% qoq) to SAR2.01bn, driven by the healthy growth across the business segments.

  • Hospitals revenue increased by 12.2% yoy to SAR1.53bn in Q2 22, pharma grew by 29.0% yoy to SAR407mn, and solutions by 5.9% on yoy basis to SAR73.2mn.

  • Hospitals remains the major contributor at 76.2% in Q2 22. However, the contribution from pharmacies to the topline increased to 20.2% in Q2 22 from 18.0% in Q2 21.

  • The increase in hospitals revenue is driven by increasing number of patients (both inpatients and outpatients’ categories), further helped by higher occupancy rates.

  • Higher number of patient visits also benefitted the pharma segment.

Client mix

  • Cash contributed for 27% of revenues and the remaining 73% was from credit in H1 22. Due to the cyclical nature of receivables cycle, the contribution of cash may increase to 30% by the end of 2022f.

  • The credit revenues majorly coming from insurance (92.0% of credit sales), while government (MoH and others) contributed c8.0% in 1H 22.


  • Group’s gross profit increased by 21.8% yoy in Q2 22, leading to a margin expansion to 33.3% vs 31.5% in Q2 21.

  • EBITDA increased by 20.3% yoy to SAR527mn in Q2 22, while EBITDA margin increased to 26.2% compared to 25.0% in Q2 21.

  • The group’s net profit increased by22.4% yoy to SAR398mn in Q2 22, resulting in a net margin expansion to 19.8% vs 18.6% in Q2 21.

Account receivables

  • Receivable days declined to 36 days in 1H 22 from 42 days in the same period during last year. Cash cycle shrunk to 11 days in 1H 22 from 21 days in 1H 21 and is the shortest cash conversion cycle in the industry.


  • The group has declared a dividend of SAR301mn (equivalent to 0.86/share) for Q2 22. This amounts to 8.6% of the capital.

  • For the first half of FY22, the dividend payout stood at SAR591.5mn.

Update on expansion progress

  • The Khobar hospital has posted positive results. The number of patients has grown more than 30% qoq. The current utilization rate is c.70%. The management is expecting the hospital to be fully functional and operating at full capacity by next year.

  • The company’s capex for the year has already exceeded SAR700mn, the management expects it to cross SAR1.2bn for 2022f.

  • The rise in debt is due to ongoing South Jeddah project, which according to the management is highly leveraged.

  • Tabuk hospital is in design phase. As Tabuk is a small town, the current design is for catering existing need only but, the design considers further scalability.

  • New hospital openings usually takes 3-4 quarters to break even. The management believes since they are opening two facilities in Riyadh and Jeddah simultaneously, it may take longer than previous average to break even.


  1. The management plans to focus on volumes to increase their market share. However, any changes in pricing are not off-the-table.

  2. The management believes there will be a minimal impact on margins from inflation as it believes the increased volumes may offset any adverse impact of rising costs.

  3. Considering the seasonal impact, the management expects higher revenue growth in the second half of 2022f. The first half of the year is generally impacted by the holiday season.

  4. The management expects pressure on margins due to expansion activities over the next few years.