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Sweden – Dedicare reports Q3 revenue losses

25 October 2013

Sweden-based healthcare recruitment firm Dedicare (DEDI: STO) reported revenue of SEK 134.5 million (€15.3 million) for the three months to the end of September 2013, a fall of -5.6% compared with SEK 142.5 million (€16.2 million) a year ago.

The company reported an operating profit of SEK 6.8 million (€774,690), down by -38.8% from SEK 11.1 million (€1.27 million) in Q3 2012. Net profit for the period fell by -30.9% to SEK 5.6 million (€637,980) from SEK 8.1 million (€1.3 million) a year ago.

For the nine-months to the end of September 2013, Dedicare reported revenue of SEK 391.8 million (€45.3 million) a fall of -4% from SEK 407.9 million (€46.5 million) for the same period last year. The company reported an operating profit of SEK 14.3 million (€1.6 million), almost half the reported operating profit of SEK 28.3 million (€3.2 million) in 2012.  Net income for the nine-month period also reported a fall, dropping by -63.9% to SEK 7.3 million (€831,660) from SEK 20.2 million (€2.3 million), year-on-year.  

Dedicare CEO Stig Engcrantz commented: “We have gone from negative to positive outcomes in Sweden. In Norway we have a lower margin primarily due to an increase in sales staff in order to continue to grow the business. The new government in Norway has pledged to continue the competitive tendering in public health activities. My assessment is that it gives us the opportunity for continued growth and profitability in Norway.”

“Growth continued in Norway with regard to hiring nurses, while revenue from the placement of doctors decreased. On the staffing side in Sweden, we lost volume primarily in the placement of doctors. The declines in both Sweden and Norway will be fixed by expanding our sales capacity during the third and fourth quarter because we see that demand remains strong in medical staffing.”

“All of the Dedicare’s business segments are now profitable. We did not reach the group’s goal of an operating margin of 7%. The reasons being that the newest units in Dedicare have not yet reached critical mass, and the company is experiencing pricing pressure in some major contracts in medical staffing in Sweden and care staffing in Norway. Falling wages for doctors and nurses also negatively affected margins. We continue to prioritise actions to deliver the best possible result for the Group,” Mr Engcrantz concluded.

Revenue from healthcare staffing for the third quarter was SEK 112.9 million (€12.9 million), a -7.9% drop from revenue of SEK 122.5 million (€14 million) a year ago. Healthcare staffing revenue declined sharply in Sweden, falling by -20.4% to SEK 57.8 million (€6.6 million) from SEK 72.6 million (€8.3 million). In contrast, Norway reported increase revenue from healthcare staffing, growing by +10.6% to SEK 55.2 million (€6.3 million) from SEK 49.9 million (€5.7 million), year-on-year.

Revenue from the company’s care division reported year-on-year growth of +7.5% during Q3 2013, rising to SEK 21.6 million (€2.5 million) from SEK 20.1 million (€2.3 million). In Sweden revenue rose to SEK 13.7 million (€1.6 million) from SEK 12.9 million (€1.5 million), increasing by +6.2%. In Norway revenue rose to SEK 7.9 million (€900,010) from SEK 7.2 million (€820,260), equating to a rise of +9.7%.

In trading today, the company’s share price rose by +2.2% to SEK 23 (€2.62), a fall of -26.6% compared with a year ago. Based on its current share price, the company has a market value of SEK 155.4 million (€17.7 million).

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