Private hospital operator opened €77m Cork cancer care facility last year and has €82m in debt
THE aftermath of the Covid-19 pandemic is likely to result in “significant changes” to the financial performance and normal operating model of the Bon Secours Health System company, the hospital group has warned.
The company’s directors cautioned in accounts just filed for the business that the magnitude of the adverse impact on its performance will depend on the duration of the Covid crisis.
It has already deferred some capital expenditure and secured additional financing to bolster its balance sheet.
The stark warning comes after the group posted revenues of €308.8m for 2019, a 7.6pc increase on 2018.
Its profit slipped to €5m, however, from €5.2m the year before.
Bon Secours operates five private hospitals around the country, as well as a care village in Cork. Last year, it also opened a new cancer centre in Cork, which was built at a cost of €77m.
The group, which employs about 3,300 people, saw the number of aggregate in-patient bed nights and day-case attendances rise to 232,469 last year from 223,181 in 2018.
But the company warned that the impact from the pandemic may include an adverse effect from “reduced economic activity and demand for private hospital treatments as well as lower patient revenues due to impacted patient flow and reduced capacity”.
“It is also expected to result in increased costs due to infection control measures required by Covid-19,” the directors added in the company’s accounts.
“These anticipated operating challenges, individually and together, have the potential to lead to a negative impact on cashflow and profitability,” they added.
“In light of these less favourable trading conditions that are expected to pertain during the crisis, the directors have initiated steps to conserve financial resources including the deferral of some planned capital expenditure and cost mitigation measures as well as securing external financial additional to that already available to the company,” they said.
The directors said the group has a “strong capital structure” and strong levels of uncommitted cash and is managing its current bank debt.
The group has also modelled the potential impact on its turnover out to July 2021 in moderate and worst-case scenarios.
It insisted that even under a worst-case scenario, its projections show that there will be no long-lasting impact on the company’s liquidity, when coupled with mitigation and other factors.
The Bon Secours’ accounts show that the group had €9.6m in cash and cash equivalents at the end of last December.
It also had net bank loans totalling €82.5m, compared to €60.3m at the end of 2018.
It has a term loan and revolving credit facility with a syndicate of lenders that includes Bank of Ireland and AIB.
The company's accounts note that just under €83m of its bank loans from those facilities fall due in 2024 and carry an effective interest rate of 1.66pc.