GEM Healthcare - Lokman: Strong March quarter with margins trending up

March quarter highlights

  • Lokman has reported 5.4% sequential growth in revenues (+14.4% YoY). All operating lines post high double-digit growth on year-on-year comparisons.
  • Margins continue trending up; 1Q18 EBITDA margin stands at 15.8% versus 14.4% in 4Q17 and 13.2% in 1Q17.
  • Quarterly net income available for shareholders reads TL2.5M versus TL2.4M generated in the March quarter of 2017. 
  • The balance sheet remains robust. Strong cash generation throughout the quarter reduced net debt to EBITDA to below 2x mark, the lowest in the industry.
  • Progress in capacity investments is in line with guidance published earlier in the year. Akay roll-out including additions and room refurbishments should be complete by year-end. Demet has turned profitable earlier in the year.

Outlook

Profit margins have widened both sequentially and on year on year comparisons. Margins, which have started trending up from 2Q17, have more to gain from operating leverage in the latter part of 2018.