Profits plunge 43pc at Galway Clinic
The reduction in prices from insurers along with an increase in costs due to rising medical inflation contributed to pre-tax profits at the Galway Clinic last year reducing by 43pc to €7.2m.
That was according to the directors of the Galway Clinic, which is part owned by beef baron Larry Goodman. They reported revenues at the clinic dipped marginally from €86.85m to €85.6m in the 12 months to the end of December last.
The accounts confirmed that the company operating the hospital - Galway Clinic Doughiska Ltd - purchased the hospital building and equipment from its parent firm, Marpole Ltd, for €106m during the year.
The owners of Marpole Ltd were listed as Larry Goodman, Brendan McDonald and brothers James Sheehan and Joseph Sheehan. The purchase was supported by a €64m loan from Marpole Ltd.
All were also listed as directors of Galway Clinic Doughiska Ltd and according to the directors the "continued increase in medical inflation, caused by a growth in demand for new technologies and the use of more expensive consumables and drugs, poses a significant challenge for the hospital".
The directors stated that the clinic was also facing higher expenditure in ensuring it met the highest national and international guidelines and "these costs are forecast to increase further every year and will form a substantial part of the hospital's future cost base".
A large contributor to the downturn in profits was non-cash cost depreciation and amortisation charges almost doubling from €4.8m to €8.44m. Numbers employed at the 146-bed hospital increased from 585 to 593 last year.
The directors also stated that medical indemnity insurance costs spiralling out of control was one impediment to attracting leading physicians into Ireland.
The firm recorded an after-tax profit of €5.8m after paying corporate tax of €1.3m.
At the end of December last the firm had accumulated profits of €78.88m.
The hospital had yet to pay a dividend to shareholders and had retained all profits in the business to date.
Staff costs climbed from €29.6m to €30.6m that included €511,547 paid to temporary contract and agency medical staff.
The amount paid to key management totalled €1.27m.