NGS Group AB (NGS:STO), a provider of healthcare and education staffing based in Sweden, reported revenue of SEK 109.7 million (€9.8 million) for the fourth quarter ended 31 December 2023, a fall of 27.5% when compared to the same period a year ago.

CEO Erika Rönnquist Hoh said, “The fourth quarter of the year is characterised by entering Norway, a new large market for NGS, the delivered effects of the restructuring program announced in Q3 and by the regions' continued reduced hiring of nurses in Sweden.”

“The decline in turnover in the fourth quarter compared to 2022 consists almost entirely of the regions' reduced hiring of nurses and where NGS's largest customer, Region Stockholm, is the region that has reduced the most,” Hoh said. “We also see a reduced demand for certain recruitment services, which in itself is linked to the current recession.”

In 2023, almost all regions have announced and implemented reduced hiring of healthcare personnel as a consequence of savings requirements. The group said this is one of the reasons for its transformation programme launched in Q3.

The restructuring program launched in Q3, which consists of both cost savings and new ways of extracting synergies in the group. The savings mainly cover personnel costs but also other costs.

During the quarter, the intended effect was achieved with lower costs across all service areas and staff. The goal is to reduce costs by SEK 12 million (€1.07 million) on an annual basis and the program will continue to have an effect going forward, the group added.

The period's lower adjusted EBITDA is linked to the lower turnover for nursing staff and lower profitability for certain recruitment services.

“The fact that we won the new contract for the hiring of nurses for the state Norwegian health companies (public hospitals) is a powerful way for us to manifest our strategy of geographical expansion into Norway,” Hoh said. “In October, the agreement started and we are very happy about a good start with strong turnover growth during the first three months of the agreement. For us, Norway will be an important market going forward.”

Recruitment and interim activities decreased net sales during the quarter compared to the previous year, as a consequence of a continued weak economy.

During the quarter, NGS Group appointed Jan Mörén, the CEO of its subsidiary Source, to also take responsibility for the group's digitisation strategy as Chief Digital Officer.

The group said NGS had a good start to the first quarter with its national government agreement in Norway.

NGS Group shares last traded at SEK 4.53 (€0.40), down 25.98% on the day and 1.57% above its 52-week low of SEK 4.46 (€0.40), set on 9 November 2023. The company has a market cap of SEK 55.22 million (€4.92 million).