AMC upbeat about prospects after 150-bln-euro investment program

The Athens Medical Center (AMC), one of the four health firms listed on the Athens bourse, has completed its 150-million-euro investment program of the last five years and is ready to make a new start in 2003, the group’s chairman, Giorgos Apostolopoulos, says in an interview. He notes that as of the new year, AMC will have seven ultra-modern hospital units in the Athens area, the Inter-Balkan Medical Center in Thessaloniki and three diagnostic centers in Romania, the Czech Republic and Bulgaria. He also explains that the 33.56 percent drop in profitability which the group posted in the first nine months of 2002 is due to high depreciation provisions. What is the state of the health sector in Greece now? As you know, this is a capital intensive industry. During the heyday of the stock market in 1999, a number of prospecting investors ventured into the sector, seeking the short-term «golden opportunity.» However, the special characteristics of the industry, the required experience and know-how, and the large amounts of capital needed are not suitable for short-term investment. And so certain distortions have arisen in the market, with «trapped» investors who remain in the industry only because they do not find it easy to liquidate their investment. I believe that the market will gradually get rid of the «opportunists» and restore the balance. What are AMC’s prospects? We are now in the last stage of our investment program, which has amounted to over 150 million euros. The results of this program will fuel our future course. The central axis of growth remains the parent company, where a number of new units have been operational for about a month now, for radiotherapy, bone marrow transplant, sports research and rehabilitation and MRA (magnetic resonance angiography). At the same time, we are completing the new wing in the Palaio Faliron Clinic which will house new departments. We also opened one of Greece’s most specialized renal centers in the Dafni clinic. A further two clinics are about to open, in the Athens districts of Peristeri and Pangrati. It is worth mentioning that AMC and the public hospital Evangelismos are the only medical establishments with laboratories accredited in a Health Ministry pilot program. What are your forecasts for the group’s 2002 results? We expect a significant rise in turnover, which clearly shows that we have not been influenced by adverse developments in the sector and remain in a lead position. Group turnover is projected at more than 150 million euros, with earnings before tax and depreciation (EBITDA) of more than 24 million; pretax profit is projected to exceed 11 million euros. In the nine months, group turnover reached 114.7 million euros, against 98.21 million in the same period of 2001, while operating profitability rose 6.9 percent. How is the Inter-Balkan Medical Center in Thessaloniki getting along? This was launched in the last quarter of 2000 and is the group’s biggest unit, with a capacity of 400 beds. At this point in time, it accounts for about 30 percent of total group revenues, with an average capacity utilization of 55 percent since the beginning of the year. As such investments take about four years to mature, we expect it to go into profitability in the next two years. What is your view regarding the dispute which has arisen with insurance companies over hospital charges? It is true to say that most problems surface during economically difficult times; it is then that the need for resolving them becomes pressing. This dispute presents an opportunity to reach a viable solution that satisfies both sides. Ours is a common goal: to provide qualitative health services, so we are anxious for this solution to defend the interests of our patients.

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