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Investing.com -- Medicover ABon Thursday reported a 17.1% revenue growth in the second quarter of 2025, with organic growth of 13.9%, broadly in line with consensus expectations of 17.4%.
The healthcare provider saw its adjusted EBITDA margin increase to 16.9% compared to 14.6% in the same period last year.
This marks the first quarterly results under new CEO John Stubbington, who took over from Fredrik Rågmark on May 1.
The Healthcare Services (NASDAQ:HCSG) segment led growth with a 17.5% revenue increase to €414 million, exceeding consensus estimates of approximately 16.8%.
India returned to double-digit growth at 13.4% in constant exchange rates, though only 5% when reported. Organic growth in this segment reached 15.6%, including price increases of 8.7%.
Diagnostic Services generated €189 million in revenue, growing 16% with organic growth of 9.9%. Laboratory test volume increased by 20.9% to 41.9 million tests, with acquisitions contributing 9.4% of this growth. The segment achieved an EBITDA margin of 17.7%.
Acquisitions contributed €22.3 million to the company’s topline in the quarter, with €9.2 million coming from Healthcare Services and €13.1 million from Diagnostic Services. The newly acquired gyms were noted as margin supportive.
Net debt to adjusted EBITDAaL ratio increased to 3.6x, exceeding the company’s 2025 leverage target of 3.5x due to acquisitions. Management expects this leverage to decrease in the second half of the year.
The company’s Polish businesses continued to drive strong segment margins, along with improvements in the Romanian hospital business.
However, new units in India and the new hospital in Bucharest remain a drag on margins, with a combined loss of €2.7 million in EBITDAaL for the quarter, an improvement from the €3.9 million loss in Q1.
Medicover did not provide updated mid-term targets in its earnings release. The company’s stock currently trades at SEK257.50, with analysts maintaining a hold rating and a price target of SEK245.00, representing a 5% downside potential.
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