Cost of expansion hits profits at Blackrock Clinic

A €100 MILLION expansion at the private Blackrock Clinic contributed to the hospital’s pretax profits decreasing by 11 per cent to €12.3 million.

Documents just filed by the Blackrock Hospital Ltd and subsidiaries to the Companies Office confirm that revenues at the company sustained a 4 per cent drop from €87.8 million to €84.3 million to the end of December last.

The hospital is undergoing a major expansion that involves the construction of three additional floors, the provision of a state-of-the-art intensive care unit and the refurbishment of the existing hospital.

According to the directors’ report, a large part of the decrease in pretax profits relates to an increase of €900,000 last year in depreciation charges associated with the hospital’s expansion and refurbishment project.

The directors said that last year the hospital spent €30.2 million on capital expenditure, of which €27.2 million was in respect of an expansion and refurbishment project.

The development – which is expected to be complete by the end of next year – will bring the total number of beds to 160.

According to the directors: “The hospital’s new extension will significantly improve and expand the facilities for both inpatients and day cases and will satisfy the hospital’s requirements in this area for the foreseeable future.”

The accounts show that the hospital’s accumulated profits at the end of last year stood at €38 million after paying a dividend to shareholders of €4.6 million. This followed a dividend payout of €4.4 million in 2008.

The directors stated: “The cost of the expansion and refurbishment project will be funded through future profits being reinvested back into the hospital together with bank debt.

“The hospital has long-term bank financing in place, which will fund this project in addition to the hospital’s future working capital requirements.”

The directors also say medical inflation contributed to the hospital’s cost base increasing “due to an increase in the amount of high-cost drugs and consumables being used together with technological advances increasing the need for more expensive high-tech medical equipment”.

The figures show that the company’s operating profits dropped by 9.6 per cent from €15 million to €13.6 million.

The accounts show bank loan repayments totalling €968,060 and finance expenses totalling €312,000. Operating expenses last year reduced by €2 million from €72.8 million to €70.7 million.

The filings show that the company’s staff costs increased marginally last year to €32.7 million, with numbers employed decreasing by 10 to 488.

The hospital employs 366 medical staff, 80 in management and administration and 42 in supplies and services, with the staff costs including €1.3 million spent on temporary, contract and agency medical staff.

The accounts show that salaries for directors last year totalled €346,437, with directors receiving fees of €72,697.

Earlier this year, the hospital opened its A&E unit, which treats minor injuries, chest pain and a range of other conditions.

The company’s land was valued at €32 million last year, with its buildings at €59.4 million. The company had bank loans of €44 million due after one year at the end of last year.