STOCKHOLM, Sweden, Feb. 26, 2002 (PRIMEZONE) -- Preliminary Report 2001:
Highlights
-- Revenue for the full year amounted to Euro 30.1 million (19.9
million), an increase of 51 percent versus last year.
-- Revenue for the last quarter amounted to Euro 8.4 million (5.8
million), a gain of 44 percent versus the corresponding period last
year.
-- Prepaid membership rose to 91,800 by year-end, an increase by
22 percent versus a year earlier.
-- The operating loss amounted to Euro 1.9 million for the full year,
against a loss of Euro 2.4 million in 2000.
-- Operating profit before depreciation amounted to Euro 0.4 million
for the full year, against a loss of E0.8 million in 2000.
-- Private equity and investment operations produced a net loss of
Euro 7.2 million, versus a gain of Euro 9.9 million for 2000.
Information dates 2002
Annual General Meeting 5/14/02
3 month report 5/15/02
6 month report 8/22/02
9 month report 11/13/02
Preliminary Report 2002 2/20/03
To our shareholders:
I am pleased to report another year of good growth for Medicover,despite a much tougher economic environment. Revenue increased by 51percent over last year to Euro 30.1 million and our prepaid membership base rose to 91,800 by year-end. The operating deficit improved to a loss of Euro 1.9 million versus a Euro 2.4 million loss last year. The operating result before depreciation improved to a profit of E0.4 million versus a loss of 0.8 million last year. This is below our expectations, primarily due to significant slow-down in the Polish economy and the effect it has had on our Polish membership growth. Medical costs were higher, especially during the second half of the year, driven by increased service utilisation by members and further investments in medical capacity in both new and existing markets. Four new or expanded facilities came on line in the second half of the year.
We achieved a medical cost ratio of 60 percent, which was some three percentage points above last year. We have increased our administrative and sales costs to be able to service a growing business as well as build a strong distribution platform and branding strategy across the region. While the increased expenses are negatively affecting this year's financial results, we see them as an investment to build a strong company and expect to see the impact in improved operating margins as our business volume grows. However, we are continuously reviewing our cost structure, to ensure we stay competitive in a changing environment.
Medical costs for the full year came in at our long-term target of 60.0 percent versus 57.2 percent for the previous year. During the year our medical costs increased by Euro 6.7 million or 59 percent. The increase is due to a combination of expanded capacity through new or replacement facilities opened during the year as well as servicing a higher member utilization. Medical costs have pronounced seasonality with highest utilization coming in the fourth quarter. The medical cost ratio is critically important and we continue to develop management and tools to ensure we meet our defined targets.
Distribution, selling and marketing costs amounted to Euro 4.1 million for the full year, representing 13.6 percent of revenue. This compares with Euro 3.1 million or 15.4 percent of revenue for the full year 2000. The investments in distribution, selling and marketing are aimed at new business and future growth. We believe that controlled distribution is one of our key competitive advantages.
Administrative costs amounted to E7.6 million or 25.1 percent of revenue for the full year. This compares with E6.3 million for the full year 2000 or 31.6 percent of revenue. Administrative costs increased in the last quarter to reflect the inclusion of the Czech acquisition and additional investments primarily in information technology-related functions. Administrative costs will continue to fall as a percentage of revenue as volume grows and further investments are made to improve the efficiency of administrative processes.
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