PARIS - French healthcare group Orpea SA (Paris:ORP) disclosed on Wednesday that its estimated earnings before interest, taxes, depreciation, amortization, and rent (EBITDAR) for the year ended December 31, 2023, fell short of its earlier forecast by 2.8%, coming in at approximately €690 million, compared to the anticipated €710 million. This revision, as reported in a press release, is attributed to factors such as lower-than-expected occupancy rates and increased personnel costs.
The company, which specializes in nursing homes, rehabilitation, and mental health care, also revealed that its 2023 revenue is expected to align with previous forecasts at around €5.2 billion. However, pre-IFRS 16 EBITDA is projected to reach about €210 million, marking an 8.7% decrease from the forecast of €230 million.
Orpea's cash position at the end of 2023 is estimated at €639 million, slightly above the forecasted €637 million. This figure includes the impact of an early salary payment in France, which had a €60 million effect.
The company noted that the financial restructuring operations carried out in 2023, particularly the conversion of unsecured debt into equity, are likely to result in a non-cash positive impact on net income of around €2.7 billion. However, this is offset by anticipated additional impairments on assets of approximately €0.4 billion, primarily due to revised real estate yields and other valuation factors.
Looking ahead, Orpea confirms its financial objectives for the 2024-2026 period, including an EBITDAR margin of 19%, reducing net debt to close to €3.6 billion, and a target net debt to pre-IFRS 16 EBITDA ratio of 5.5x.
The company's final consolidated financial statements for 2023, subject to statutory audit, are expected to be released by May 2024 at the latest. The estimated financial data presented in this update have not been audited by Orpea's statutory auditors and are based on current reasonable assumptions and estimates.
This financial update is based on a press release statement provided by Orpea and does not include any speculative content or forward-looking statements beyond those made by the company.
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