This is the biggest drop on Monday at the Paris Stock Exchange. The manager of retirement homes Orpea plunged more than 20% to the lowest of the day, dragging in its wake Korian (-4%), another listed player in the sector. The action is now down 80% since the start of the year.
The bad news of the day comes from the publication of preliminary financial indicators for the first half. They are in sharp decline, in particular at the level of the operating margin (Ebitdar), falling by more than 6 points in the space of a year, to 18.5% against 24.9% at the end of June 2021.
Profitability was affected by the reduction in compensation mechanisms relating to Covid-19, which the increase in the group’s occupancy rate does not make it possible to offset, by a large amount of products specific to 2021 not renewed, by an inflationary context on purchases (particularly energy), but also through a more active recruitment policy, more particularly in France, in a tight labor market “, explains the group in its press release.
Rising energy costs
In detail, the reduction in compensation relating to the Covid-19 pandemic received in the various countries accounts for two-thirds of the change in the margin between the two semesters, the other third of inflation relating to purchases while the rates charged for patients and residents remained almost stable previously. The impact has been observed on foodstuffs and even more so on energy, notably electricity.
Turnover remains up sharply by nearly 11%, to 2.29 billion euros, supported by the company’s internal growth and the opening of new beds, while the rate of occupancy is higher than that observed over the same period of 2021. The trend was also confirmed in July and August, which confirms Orpea’s confidence in the prospect of a solid dynamic of invoicing for all of 2022.
Conversely, the deterioration in the financial performance of the activities recorded in the first half will continue in the second part of the year and ” could, if necessary, be amplified by the additional volatility observed recently on the energy markets “, Warns the manager of retirement homes. Since then, the Ebitdar margin rate for the second half could then be lower than the level of the 1st half. »
Impairment tests
In July, Philippe Charrier was replaced as chairman of the group by the former head of the SNCF, Guillaume Pepy. He had left a ship at the edge of the abyss, from the ” extremely deep crisis » known after the publication, in January, of the book The Gravediggers. This investigation, carried out by Victor Castanet, denounced the ill-treatment suffered by residents in Orpea retirement homes. The controversies then followed on from financial fraud carried out by certain ex-executives of the company. Among these people is Yves Le Masne, managing director who has since been replaced by Laurent Guillot, a former Saint-Gobain employee.
The time is, therefore, to regain control. To this end, Orpea announces, on the occasion of the publication of these preliminary indicators, that impairment tests, which relate mainly to certain intangible assets, are in progress. ” On the basis of the information in its possession », the company estimates to date that the depreciations which could result from it would be between 170 and 220 million euros.