The Voxel Group Expects An Increase In The Volume Of Diagnostic Services

This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0.

Sector: Health care & biotechnology Market Cap: US$ 78.5 m

Fundamental rating: Hold (→) Bloomberg code: VOX PW

Market relative: Underweight (→) Av. daily turnover: US$ 0.02 m

Price: PLN 35.8 12M range: PLN 33.50-55.60

12M EFV: PLN 46.4 (→) Free float: 51%

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Voxel’s 2Q22 financial results deteriorated qoq and yoy, in line with our expectations, due to the fact that (i) testing for SARS-CoV-2 almost entirely stopped, (ii) the hospital generated losses, (iii) write-offs for closing 3 laboratories testing for SARS-CoV-2 were made, and (iv) Alteris posted weaker results. Quite a high demand is observed in the diagnostic segment (PET and SPECT scans).

2Q22 financial results summary

In 2Q22 the Group performed altogether 92,000 diagnostic tests (up 12% yoy), including 33,000 CT scans (up 6% yoy), 51,000 MRI scans (up 16% yoy), 4,000 PET scans (up 17% yoy), and 4,000 SPECT scans (up 25% yoy). 2Q22 net revenues from diagnostic services reached PLN 51 million (up 24% yoy).

2Q22 unconsolidated revenues amount to PLN 49 million (up 20% yoy) vs our forecast at PLN 48 million (up 17% yoy). The revenues of RP/ Scanix/ Exira/ Vito-Med/ Alteris stand at PLN 2/ 6/ 2/ 6/ 18 million vs our expectations at PLN 2/ 6/ 3/ 6/ 17 million.

2Q22 consolidated revenues amount to PLN 76 million (down 29% yoy) and are in line with our expectations; a yoy revenue decline resulted from much lower revenues of Vito-Med and Scanix caused mainly by a halt of testing for SARS-CoV-2.

The Group’s 2Q22 EBIT hit PLN 8 million while the EBIT adjusted for costs of closing 3 labs was close to PLN 10 million (down 65% yoy); the deterioration stemmed from the EBIT decline in Vito-Med (down PLN 17 million) and in Alteris and was not offset by the improvement in the diagnostic service segment (the parent company’s EBIT rose by PLN 3 million, up 48% yoy).

Guide to adjusted profits

Results adjusted for write-offs, costs of closing 3 laboratories testing for SARS-CoV-2.

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Net financial costs were flat yoy, in line with our expectations. The Group’s 2Q22 NI/ adjusted NI hit PLN 5/ 6 million which was below our expectations.

The Group’s operating/ investing cash flows reached PLN 2 million/ PLN -13 million vs PLN 32/ -9 million a year ago. Net debt in the discussed period stands at PLN 111 million (down 4% yoy).

Expectations for the coming quarters

The Group expects the diagnostic services volume to rise in the quarters to come and we believe this business segment will constitute strong support for this year’s financials. The backlog in Alteris is estimated at PLN 105 million. Vito-Med closed 3 (out of 4) labs testing for SARS-CoV-2 as from April 1 NFZ stopped funding the testing for SARS-CoV-2 performed by laboratories and mobile sites. It is expected that in 2H22 this will not change. The Company has been restructuring the hospital business in order to increase its revenues keeping the current level of employment and existing equipment base intact. Nevertheless, the hospital will burden this year’s results, we believe.

Financial forecasts

We do not modify our financial forecasts for Voxel. As regards the recurring results (one-offs excluded), in 1H22 the Company realized 51%/ 55%/ 58%/ 61% of our FY22 forecast of sales/ EBITDA/ EBIT/ NI. Assuming that subsequent two quarters will be similar to 2Q22 on the operating level, we believe our FY22 EBIT forecast is likely to be fulfilled.

Analyst: Sylwia Jaśkiewicz, CFA

GPW’s Analytical Coverage Support Programme 3.0