Luz Saúde freezes dividend waiting for new investor
The healthcare group owned by Fidelidade made a profit of 38.5 million euros and will freeze its dividend to finance the expansion of its business. It hopes to find a new investor by the summer.
Luz Saúde has once again frozen its dividend as it awaits for a new investor, due to arrive in the summer. Despite the fact that results accelerated by 24% last year, the hospital group led by Isabel Vaz decided not to distribute any money to shareholders. Instead, it will retain profits of 38.5 million euros to invest in the business’s “ambitious expansion project”.
The decision — which will be put to the vote at the general meeting on 26 May and follows the policy of recent years — comes at a time when Fidelidade is heading towards the final stage of the process to sell part of Luz Saúde’s capital. The operation is expected to be finalised during next summer and will bring a new partner to speed up the activity of one of the largest private hospital groups in the country.
The insurance company owned by the Chinese Fosun — which declined to comment on the process — is willing to sell 40% of Luz Saúde’s capital, seeking a valuation of more than one billion euros for the hospital group.
According to Mergermarket earlier this month, several groups are in the running, including private equity funds such as CVC, KKR, Ardian, Macquarie, Advent and EQT Future and healthcare groups such as PureHealth and Rede D’Or. The advisor Natixis has already received the non-binding proposals.
Luz Saúde has 14 private hospitals and 15 clinics, more than 1,100 inpatient beds and 56 operating theatres and employs more than 14,000 workers.
Last year, the group’s turnover rose by 10% to 733 million euros, reflecting the increase in the volume of medical acts, especially in the units where the group has invested in recent years, and also the updating of the prices of the medical services provided.
Investment exceeds 80 million
By withholding the results, the board of directors considers that it can “thus affect the funds available for the realisation of the projected strategy”.
Luz Saúde wants to continue growing with a new investor, but it hasn’t stopped investing. Last year it says it invested more than 80 million euros in fixed assets, having favoured the expansion of its network of health units, which saw an investment of 25.8 million.
The group highlights the opening of the Carreira health clinic in Funchal, Madeira, last year, while also investing in the expansion of its units in Leiria, Figueira da Foz, Vila Franca de Xira, Aveiro, Torres de Lisboa and Ribatejo and also in the digitalisation of the group’s operations (eight million euros).
Beyond the domestic market, Luz Saúde says it will “continue to analyse growth opportunities in other markets” throughout this year.
Failed IPO cost 900 thousand euros
A year ago, Fidelidade attempted an initial public offering (IPO) of Luz Saúde, but the deal fell through at the time of the decision due to “adverse market conditions” that didn’t allow it to meet the price conditions the insurer was asking for.
The operation – which was to take Luz Saúde back to the stock exchange – had a negative impact of 900,000 euros on the hospital group’s accounts last year, the financial report reveals, although without detailing the costs.
