PROJECTS: Egypt's Speed Medical sets ambitious profit goals for 2022

Company to invest in new laboratories, Covid-19 testing centres, medical complexes, hospitals and digital healthcare

  
Scientists wearing full protective suit working in the laboratory. Image used for illustrative purpose.

Scientists wearing full protective suit working in the laboratory. Image used for illustrative purpose.

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(Corrections: 'Revenue' to 'profit' in the headline; in the second paragraph, 200 million pounds corrected to 'anticipated net profit, and new line inserted on six-month profit numbers)   

Egypt's Speed Medical Company (SPMD), which develops and operates diagnostic laboratories, clinics and hospitals in the country, is targeting a 150 percent increase in net profits in 2022, the company's chairman said. 

Mahmoud Lasheen told Zawya Projects that the EGX-listed company is targeting a net profit of 500 million Egyptian pounds ($32 million) in 2022 compared to anticipated net profit 200 million pounds ($13 million) for 2021. The company had announced a net profit of 108 million pounds ($6.9 million) in the first six months of 2021. 

He said SPMD plans to invest approximately 190 million pounds ($12 million) in its 2022 expansion programme. 

Lasheen said the company has signed a 24-month contract with the [unnamed] holder of the license to establish and operate COVID-19 drive-through testing centres in Egypt. 

Mahmoud Lasheen, Chairman, Egypt's Speed Medical Company (SPMD).

SPMD would manage and operate these centres, and the revenues would accrue directly to the company, he said, adding that costs, as a percentage of revenues, is estimated to be 71 percent. 

He said the drive-through testing deal is expected to increase the company’s revenues and pre-tax profits by 52 million pounds ($3.3 million) and 14.5 million pounds ($923,274) respectively in the fourth quarter of 2021; 255 million pounds ($16 million) and 71.4 million pounds ($4.6 million) respectively in 2022, and 165 million pounds ($10.5 million) and 46.2 million pounds ($2.9 million) respectively until the end of the contract period [in 2023].  

In September, an SPMD unit had signed a contract with MEDAF Investments Holding to conduct pre-employment medical tests including Covid-19 tests for up to one million Egyptian workers going to Libya for reconstruction projects. The company had said in a bourse statement that Speed Labs will conduct pre-travel Covid-19 tests for a minimum of 600,000 travellers, with expected revenues of 336 million pounds ($21.4 million). 

The company expects to generate revenues of 965 million pounds ($61 million) from the contract, which will conclude by end-2022, according to the SPMD chief. 

New hospitals and labs 

For the medical laboratory business, Lasheen said the plan is to grow the number of laboratories from existing 134 to 180 over the next 12 to 14 months. 

He said the company is scheduled to open a new 6-million-pound ($382,044) medical complex in Suez governorate by the end of 2021, followed by one each in New Cairo and Sheikh Zayed city in 2022 at a total investment of about 9 million pounds ($573,066.63). 

The company currently operates two medical complexes in Heliopolis. 

He also disclosed out that the 65-bed first phase of Speed Medical’s 140-bed hospital in Cairo - Ismailia Desert Road is scheduled to open by the end of 2021.  

He said the entire project, being developed at an investment of 330 million pounds ($21 million), would be completed by the end of 2022. 

Last month, SPMD had signed a three-year, 1.57-billion-pound ($100 million) financing agreement with Luxembourg-based private alternative investment group GEM Global Yield (GGY). A company statement had said the new facility would provide financing for acquisitions, aggressive expansion plans, new venture financing as well as consolidating current bank obligations. 

Digital health 

SPMD is also venturing into digital health with the company acquiring a major stake of 25.01 percent in Digital Wellness, which owns the Care Square app. The app enables patients to book appointments at clinics, take laboratory and radiology tests, obtain medicines and consult doctors through videos. 

Lasheen said the company is aiming to reach an “advanced position” in this field within the next two years. 

(1 US Dollar = 15.68 Egyptian Pounds) 

(Reporting by Eman Hamed; Editing by Anoop Menon) 

(anoop.menon@refinitiv.com

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© ZAWYA 2021


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