NMC's new CEO puts expansion and innovation as new strategy
Source: 6 April 2017 | Khaleej Times
"Prasanth Manghat, the new CEO of the NMC Health, may not have the larger than life public aura of his predecessor Dr B.R. Shetty.Mild in manners and gentle in deportment, but it is Manghat's financial acumen and entrepreneurial shrewdness, which will be driving the UAE's biggest private healthcare giants' future global agenda."
"I admit I have big shoes to fill. But it has been a well-planned and groomed succession, and I have been fortunate enough to work in a 42-year old company set up from scratch by Mr Shetty in a 45 years old country," said Manghat who joined the company 11 years ago. As the Chief Financial Officer in 2012, he was the man behind the company going public in 2012 with the London IPO listing.
Since then NMC's main focus has been expanding its portfolios within the UAE and GCC, with the latest being the acquisition of Al Zahra hospital in Sharjah for $560 million in February this year.""We are highly geared up for diversifying the portfolio, and our main is focus is GCC. Saudi Arabia, Oman, and Qatar are key markets where exist a demand-supply gap. In 2015, we came up with a new strategy to expand both organically and through acquisitions.
For that we need funds and we raised $825 million through corporate debts. NMC made the first leap into the Saudi Kingdom in August 2016 by building a new hospital and buying stakes in another. The healthcare group is poised to open a fertility clinic in Qatar before the end of 2017, and also complete the acquisition of two private hospitals in Oman.In the UAE, the company raised equity to establish the flagship $200 million NMC Royal Hospital in Khalifa City, which is a 500-bed facility.
The company has a market capitalization of nearly 1.5bn (Dh8.4bn) and reported more than 65 per cent profit growth for 2016."Two things investors look for is sustainability and predictability. We used the money, gave good benefits to our shareholders with almost 40per cent growth on share prices in less than five months, and have gained investor confidence," said Manghat. At this stage, Manghat said, the company has decided to issue bonds to fund its acquisition plans, as it (bonds) is the best alternative to fuel growth. There is a price advantage to a bond as there is more cash preservation compared to a debt. We are confident our shareholders will be comfortable with the idea.
Even when talking money, Manghat stresses that Innovation is at the heart of NMC's future strategy. My priority is definitely the medium to long term results. A digital transition is inevitable. IT is really helping transform the way and the cost at which healthcare is delivered and we are looking at new start-ups for innovative solutions. The way we accumulate data and use it will largely decide how we improve healthcare, plan research and personalise patient care.
The proper coding of diseases ensures that patients are not over-diagnosed or over-prescribed. The fact that we treat 4.5 million patients a year, makes it easy for us to extract reliable data to decide diagnosis and models of treatment delivery in future. Manghat said research and development are key areas of focus in the UAE. We have developed world-class infrastructure and have the best medical professionals from all over the world working in our hospitals. We need to build awareness among the local public so that rather than sending patients outside for treatment, the UAE should attract in-bound medical tourism.
"Within the next five years, my vision is to make NMC the most preferred healthcare provider in the Middle East. If we are able to do it, it will help us offer affordable prices, improve accessibility of same knowledge throughout the region and channelize the procedures, which will again reduce the clinical risk. That is the big goal."
