Orpea scandal: financial results down nearly 60% for the group of private nursing homes


In order to anticipate the impact of the scandals revealed in January and the resulting procedures, the group of private nursing homes has published very poor financial results. Before a year 2022 which could prove to be just as complicated.

It is a free fall at the height of the scandal. The group of private nursing homes Orpea announced this Friday a net profit down 59.3% for 2021, due to provisions, and the signing of an agreement with its main banks to “respond to the current context of uncertainty”. This agreement is part of “an amicable conciliation procedure”, to prevent difficulties, open to the Commercial Court of Nanterre, the group said in a press release.

Orpea has been under fire from critics since the publication at the end of January of Victor Castanet’s investigative book the Gravediggers. The independent journalist denounced in particular the mistreatment of residents and the misuse of public funds. A report commissioned by the government in the process pointed to serious dysfunctions in early April. The State lodged a complaint and demanded the restitution of public grants presumed to have been diverted from their purposes.

Scandals which logically had an impact on the group’s financial results. The latter posted a net profit of 65.2 million euros in 2021, down 59.3% compared to 2020, after having provisioned 83 million euros “for risks and charges relating to estimated risks for the years 2017-2021 following administrative investigations” which the group has been subjected to. In this context, it plans not to pay a dividend.

Nearly 80 complaints filed

For the current year, Orpea expects “to face exceptional charges related to the management of the crisis and its consequences”. It also expects its profitability to be affected by the rise in inflation which affects “energy costs and wages in some countries”. The group says “confident in the growth dynamic” of its 2022 revenue but has not published any forecast figures. In the first quarter, turnover increased by 9% to 1.12 billion euros.

The agreement signed with the banks is also part of the “an amicable conciliation procedure”, to prevent difficulties, opened in April at the Commercial Court of Nanterre, the group said in a press release. Nearly 80 complaints from families of residents have indeed been filed with the Nanterre public prosecutor’s office against the leader of establishments for the elderly and dependent, for “endangering others” and “manslaughter”. “This agreement with the banks responds to the current context of uncertainty weighing on Orpea, as well as closed access to the financial markets and the slowdown in the asset disposal program initially envisaged”, explained the group.



Source link -83