Medicare Group Q.P.S.C. (MCGS) Earnings Call Transcript & Summary

Hello, and welcome to Medicare Group. Please note that this call is being recorded. You will have the opportunity to ask questions to our speaker for today later on during the Q&A session. [Operator Instructions] I'd like to hand the call over now to Phibion.

Thank you all for joining us this afternoon for the Medicare Group Earnings Conference Call for Q1 2026. On the call today from Medicare Group is Muhammad Burjaq, who is the CFO and IR Officer. And as usual, Muhammad will first give us an overview of the Q1 performance, and then we have a Q&A session immediately afterwards. Let me turn over the call to Muhammad to begin. Over to you, sir. Please go ahead.

Thank you, Phibion. Good afternoon, everyone, and welcome to Medicare Group Q1 2026 Results Conference Call. As usual, I'm going to start with a brief on our performance, after which we can move to the questions and answers. Medicare Group reported a net profit of QAR 10 million in Q1 2026 compared to QAR 21.6 million in Q1 2025, which represents a decline by almost 54%. Now the main cause for such a decline is the 13% decrease seen in operating income, which was a direct result of the ongoing geopolitical situation in the Gulf leading to a major drop in patient numbers specifically residents during the month of March 2026. Now this, together with the Eid holidays, 3 days of Eid holidays, reduced operating income by QAR 16.5 million. Operating costs, on the other hand, and due to the presence of fixed costs such as salaries, only decreased by 4.5% when compared to the 13% decline in operating income. As for G&A expenses and due to our cost containment efforts, they decreased by 7%. With regards to the court case with SEHA, the final judgment was passed by the Court of Cassation during the quarter, obliging SEHA to pay Medicare Group an amount of QAR 130 million. We are currently in the process of execution of the judgment. Moving to our projects, works relating to the construction of the new physiotherapy, orthopedic and ENT centers were complete, and the project will be operational very, very soon. I hope this has shed some light on our performance. We can now move to the questions and answers.

[Operator Instructions] Your first question comes from Adnan Muqeem with AI Rayan Investment.

So I have 2 questions. One is like you said that there was fewer number of patients due to the Eid holidays and Ramadan. I wanted to like find out like how -- what was the occupancy during this period compared to previous year?

We had -- I mean the main cause for the decline is just not just Ramadan because Ramadan was present during last year as well. It's the 3 days of Eid coupled with a major reason, which is the decrease in the volume of residents here in Qatar. A lot of people -- I mean, you're aware of what happened during March. Schools were online, some people chose to leave the country during that period. This affected us negatively, reducing our volume by around 30% during the month of March alone. So this was the main reason for the decline in operating income.

Could you clarify like it's inpatient or outpatient, the 30% decline?

Both. Inpatient. A lot of people delayed their elective surgeries during the period. Even if they have not left the country, people chose to postpone any elective or nonurgent procedures. And we've already seen -- on the positive side, we're already seeing an improvement in the numbers in April, I mean, post Eid, month-to-date -- compared to month-to-date last year, there is an improvement, which is a very positive sign.

So currently, like how is the volume? Is it recovered in April?

Yes, it has.

It has recovered. And any update on SEHA program?

SEHA, as I mentioned before, the Court of Cassation passed the final judgment. Now our lawyers are in the process of execution of the judgment against SEHA.

No, I'm talking about the new Seha, which government wants to...

The new Seha -- it was supposed to come about this year. The first date we heard was April and then we heard for mid-year, but no new announcement by the government. So we don't know when that will go online. And I think everybody is waiting for the situation in the Gulf to settle and to be able -- to project and to make decisions based on solid grounds. Can you hear me?

Thank you.

I think we can move on to the next question, if we have anybody online.

Your next question comes from the line of Jonathan Milan with Waha Investment.

You mentioned -- just a few moments ago, you mentioned that the volumes are back to normal. I mean are they back to normal, are you seeing growth again year-on-year or back to normal, I mean, relatively speaking, you're flat year-on-year because...

I'm not going to -- I'm not going to say it's major growth, but there is growth year-on-year, yes.

Okay. Excellent. And with that growth, and again, we've seen decent cost containment year-on-year, you should actually see some expansion in margins.

[Foreign Language] We're working -- I mean we're continuing our efforts with regard to the costs, and hopefully, it will reflect positively in the next quarters on the margin.

Okay. And may I ask what's your spare capacity? What's your bed utilization or bed occupancy and the same for the outpatient clinic?

Now, the usual bed occupancy average annual is around 60%. But for the quarter, it was much, much slower because of March. I mean, the decline in inpatient was a bit higher than outpatients. A lot of people chose to, I mean, postpone the nonurgent elective surgeries. And this explains also the increase in volume because it's a timing difference. Whoever didn't do it during March, will do it again in April.

Of course, makes sense. And then, sorry, you mentioned some additions of the services, some form of expansion. Can you please elaborate on this because I'm sorry, but I'm not very familiar with that.

Sure. I mean, we did -- I mean, we have a new -- had a new expansion project. We are moving certain clinics from the main building, which is the original old building. Basically, physiotherapy, orthopedic and ENT centers, ophthalmology, we're moving it to a new building, which is now complete. We are actually in the process of shifting these clinics. These clinics were occupying certain rooms, They were patient rooms that were converted to clinics and now removing the clinics, and we're going to be working on the rooms again to convert them to inpatient rooms.

And what kind of growth -- how many rooms could that have?