Tuesday 28 May 2019 4:15 pm

NMC Healthcare raises guidance after Saudi Arabia pension fund deal

NMC Healthcare's share price rose more than seven per cent today after the Abu Dhabi-based company raised its full-year guidance on the back of a partnership with Saudi Arabia’s state-run pension fund.

Read more: NMC Health shares soar following Aspen acquisition and profits rise

The private hospital and care provider now expects sales of between $2.5bn (£1.97bn) and $2.54bn, higher than its previous upper target of $2.46bn set in October.

Projected earnings before interest, tax, depreciation and amortisation (Ebitda) have also risen, and are now set to come in between $575m and $585m, compared with the $566m-$576m range originally projected.

The FTSE 100-listed company has finalised a joint venture agreement with Hassana Investment Company, the investment arm of Saudi Arabia’s state-run pension fund, the General Organization for Social Insurance (Gosi), which also made an additional $66mn cash injection in the joint venture, called NMC KSA.

NMC Healthcare will control 53 per cent of the venture, while Gosi’s stake totals 47 per cent.

The formation of the new company follows a preliminary agreement in October that included plans to invest up to 6bn riyals in the kingdom’s healthcare facilities by 2024.

Shares in NMC Healthcare rose 6.4 per cent in London this afternoon, to hit 2,595p. But the group, which was the first of its kind from Abu Dhabi to list on the London Stock Exchange in April 2012, has seen its share price drop 3.7 per cent since the turn of the year and 28 per cent since May 2018.‚Äč

Prasanth Manghat, chief executive of NMC Healthcare, said: "We have a clear vision for transforming NMC KSA into one of the most dominant players in the country. We will rapidly implement our strategic plan, bringing higher value services in the country, such as IVF, cosmetics and leveraging our association with Boston and Cincinnati Children Hospitals to strengthen paediatrics in KSA.

Read more: The healthcare system is trapped in an impasse with seemingly no way out

"We see many opportunities of leveraging growth by bringing its operational metrics in line with other healthcare operators in the Kingdom. We thus continue to view the future, both in the UAE and in KSA, with considerable optimism."