Pihlajalinna Oyj

Earnings Release • Jan 24, 2024

Insider Information: Pihlajalinna writes down its receivables from previous years and provides preliminary information for 2023 results

Pihlajalinna Plc Insider Information 24 January 2024 at 8:30 a.m.

Insider Information: Pihlajalinna writes down its receivables from previous years and provides preliminary information for 2023 results

Pihlajalinna Plc specified its outlook for the year 2023 on 3 November 2023 concerning items that may, according to the management's estimate, influence the profitability of complete outsourcing agreements with a delay. As a result of the establishment of the wellbeing services counties, Pihlajalinna aimed to finalise the negotiations related to open receivables from previous years with the former contract parties during 2023. All the negotiations have not led to the desired outcome, and Pihlajalinna is considering legal actions for debt recovery. Consequently, these items no longer meet the definition of trade receivables, and the company classified them as contingent off-balance sheet assets pursuant to IAS 37. The write-down of the receivables amounts to EUR 8.2 million. 

The company has also reviewed its non-current investments, the valuation of its interests in associates and loan receivables. The write-down due to this review amounts to EUR 2.4 million. 

The write-downs have no impact on the company's adjusted EBITA, as they are treated as non-recurring adjustments outside the annual result. The write-downs in the financial statements decrease the company's earnings per share EUR 0.37. 

Based on preliminary unaudited information, Pihlajalinna estimates 2023 revenues to total approximately to EUR 720 million (EUR 690.5 million in 2022) and adjusted EBITA to exceed EUR 37 million (EUR 26.7 million).

Pihlajalinna's outlook for 2023 (published on 3 November 2023):

In 2023, Pihlajalinna will focus on improving its profitability and financial position.

• The Group expects the consolidated revenue to increase from the previous year's level (EUR 690.5 million in 2022).
• Pihlajalinna specifies guidance for 2023. The Group expects the adjusted EBITA to improve from the previous year's level to EUR 34-37 million (EUR 26.7 million in 2022).
• As a result of the establishment of wellbeing services counties, Pihlajalinna aims to finalise the negotiations related to open receivables with the previous contract parties Jämsä, Parkano and Mänttä-Vilppula cities. The outcome of the negotiations may affect 2023 earnings per share.
• The Group continues measures to strengthen its financial position. Change negotiations that were concluded in March 2023 and efficiency improvement program are expected to improve Pihlajalinna's profitability. Price increases are expected to compensate the effects of cost inflation.
• Slower economic growth, weakened consumer confidence and rising market interest rates may affect Pihlajalinna's service demand and financial performance more than expected.

Pihlajalinna will publish its Financial statements release 2023 on 14 February 2024.

Pihlajalinna Plc

Further information:

Tuula Lehto, Vice President, Communications and Sustainability tel. +358 40 588 5343 or tuula.lehto@pihlajalinna.fi

Distribution:

Nasdaq Helsinki Major media investors.pihlajalinna.fi

Pihlajalinna in brief

Pihlajalinna is one of the leading providers of private healthcare and social services in Finland. The Group provides comprehensive and quality private clinic and hospital services as well as occupational healthcare and insurance cooperation services. To the wellbeing services counties Pihlajalinna offers social and healthcare service production models, in which the cooperation between the public and private sectors guarantees effective services for citizens. More than 7,000 employees and 2,200 practitioners work at Pihlajalinna. In 2022, Pihlajalinna's revenue was 690.5 million euros. Pihlajalinna's shares are listed on Nasdaq Helsinki Oy. Read more www.pihlajalinna.fi.