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Dedicare Q2 sees a continued challenging market

Dedicare Q2 sees a continued challenging market

July 12, 2024
Stock Market

Dedicare Q2 sees a continued challenging market

Dedicare AB (DEDI:STO), a staffing firm focused on healthcare, life sciences, and social work, reported revenue of SEK 439.6 million (€38.4 million) for the second quarter (Q2 2024), down 8% from the previous year. Dedicare CEO Krister Widström said, “The challenging start to the year continued…into the second quarter. The reduced turnover compared to last year is mainly explained by Sweden’s weak healthcare staffing market. The weaker Swedish market and price pressure on the Norwegian market explain the decrease in earnings.

SEK millions)Q2 2024Q2 2023ChangeQ2 2024 (€ millions)
Revenue439.6478.9-8.21%38.3
EBITDA24.240.7-40.54%2.1
Operating profit (EBIT)18.934.4-45.06%1.6
Net profit for the period15.322.9-33.19%1.3

In May, Dedicare decided on a cost-saving program. The plan is to provide annual savings of approximately SEK 15 million, with full effect from the fourth quarter of this year. They also implemented a management change during the quarter. Eva Brunnberg, CEO of Dedicare Sweden, left the company and Bård Kristiansen, CEO of Dedicare Norway, took over as interim CEO of Dedicare Sweden. The process of recruiting a new CEO for Dedicare Sweden is ongoing.

(SEK millions)
Q1 2024Q1 2023Change

Q1 2024

(€ millions)

Sweden87.4121.8-28.2%7.6
Norway282.3280.60.6%24.6
Denmark58.667.5-13.2%5.1
UK13.510.627.4%1.2

Look at the country breakdowns: “The market for care staffing in Sweden was weak and difficult to navigate as a result of the introduction of the new national agreement, restrictions on hiring, care strikes and overtime blockades”. Net sales fell by 28.2 per cent to SEK 87.4 (121.8) million, and EBITA adjusted for non-recurring items related to the cost-saving program fell to SEK 0.5 (6.0) million, with an adjusted EBITA margin of 0.6 (4, 9) percentage. Before adjusting non-recurring items, EBITA was negative SEK -2.4 (6.0) million.

Norway, the firm’s largest market, “remained strong, but was negatively affected by increased price pressure. Both net sales and operating profit fell in the quarter compared to the previous year. However, the second quarter of the year was stronger than the first quarter, both in terms of net sales and profitability” according to Widström. Net sales for Norway amounted to SEK 282.3 (280.5) million, while EBITA fell to SEK 22.2 (29.8) million, corresponding to an EBITA margin of 7.9 (10.6) per cent.

In Denmark, medical staffing continued to go well, and the company also received an extension on long-term assignments for midwives. On the other hand, the segment continued to be negatively affected by the restrictions on hiring nurses on long-term contracts, which contributed to the segment’s net sales in the second quarter falling to SEK 58.6  from SEK 67.5 million. The EBITA margin increased and amounted to 7.5 (6.1) per cent.

The company’s investments in the UK continue. They consist partly of international recruitment and staffing and partly of medical staffing. In the quarter, Dedicare recorded a 27 per cent growth and a net turnover amounting to SEK 13.5 (10.6) million. During the quarter, they invested in more employees in sales, business development and recruitment, which affected profitability, and the EBITA margin fell to 3.0 per cent (7.5). According to the company, the

This morning, Dedicare shares traded at SEK 62.70, down 2.79%, but 17.42% above the 52-week low of SEK 53.40 set on May 02, 2024. The company has a market cap of SEK 487.02 million ( EUR 42.48 million).

The full quarterly report in Swedish is available below: