Hello everyone, this is Ahmed Moataz from EFG Hermes, and welcome to Care Medical's 2025 results conference call. I'm pleased to be joined with Dr.

Abdulaziz Al-Obaid, Chief Executive Officer; Jahanzeb Khan, Chief Financial Officer; Naseer Ali, Chief Strategy Officer; and Alia Balbaa, Director of Investor Relations. As usual, the company will start with a presentation and then we'll open the floor for Q&A.

Care's management, please go ahead.

Thank you, Ahmed, for the introduction. Good afternoon, everyone, and Ramadan Kareem.

We are pleased to present to you our full year results for 2025, which reflect another year of strong financial and operational performance. 2025 was a remarkable year for Care as we delivered strong revenue growth of 24% year-on-year, with patient volume growth sustained across our facilities and sustained solid margins.

Also, we witnessed the full year impact of Al Salam Hospital, which further strengthened our overall performance. On today's call, we will walk you through the operational and financial performance, as well as provide an update on gross road map, including our strategy refresh and expansion agenda.

Dr. Abdulaziz will begin with an overview of our performance and strategic direction.

After that, Mr. Jahanzeb Khan will walk you through the financials in more detail.

Then we will open the floor for Q&A. With that, I will hand it over to Dr.

Abdulaziz to begin.

Thank you, Alia, and good afternoon, everyone. Thank you for joining us today.

2025 marked a meaningful step forward in our growth journey. Throughout the year, we delivered strong revenue growth, supported by rising patient volumes, which grew 33% year-on-year to 985,000 patients, and you can see this in the middle top column.

This reflects as well the full year impact of Al Salam Hospital and sustained growth at our legacy facilities. The outpatient visits rose by 32% year-on-year while inpatient admissions increased 39%.

During the fourth quarter of the year, the patient volumes rose 15% year-on-year on a fully like-for-like basis, with Al Salam fully operational in both periods, reflecting strong underlying demand. This operational momentum translated into solid financial results, with revenue increasing 24% year-on-year to SAR 1.6 billion.

That is driven by strong volume performance at our legacy hospital and a significant uplift from Al Salam Hospital. The revenue growth also reflects higher referral volumes from key clients, including GOSI and MOH.

The revenue growth was further supported by improved utilization, with overall occupancy averaging 83%, and that's up from 68% in 2024. In the bottom right, you can see in terms of profitability, the gross profit increased 31% year-on-year, the EBITDA growth grew 23% year-on-year to SAR 465 million, and the net profit increased 8% year-on-year to SAR 318 million.

Despite one-off legal provision and zakat provision reversals recorded in quarter four of 2024. Excluding these one-off items, the underlying net profit increased 43% year-on-year.

As we enter 2026, and as outlined in the strategy refresh that was part of the earnings release, we will continue to expand and scale our operations in high-value segments, broaden our service mix, and drive further efficiency across the network. Building on the progress we have made, we have refreshed our five-year strategy to accelerate growth and scale Care Medical into a fully integrated health care platform.

This refresh will ensure that we remain at the forefront of evolving health care trends across the kingdom. At the core of our strategy refresh is a clear and ambitious geographic expansion plan, anchored in a dual-hub model focused on Riyadh and the Western Province, where demand fundamentals are compelling.

These markets will serve as our primary growth platforms as we build integrated hospital and clinical networks to drive scale, density, and operational leverage. From a segment perspective, our primary growth engine remains the class B segment, where demand continues to outpace supply and where we benefit from a strong brand recognition and competitive positioning.

At the same time, we will still pursue selective expansion into the class A segment through carefully selected facilities and international partnership in high-demand specialties within a certain geographic locations in the cities. A key example is Al Narjis Hospital, which is designed to support our premium positioning in Northern Riyadh.

Turning to our payer strategy, we will continue to strengthen our partnership with GOSI and MOH payer while further diversifying our payer mix through deeper engagement with private insurers. This will be supported by clearer facility segmentation and continued improvement in clinical quality and operational efficiency.

In terms of execution, we are adopting a disciplined growth approach, balancing strategic acquisition with greenfield development in parallel. We will pursue capital-efficient outpatient expansion to enhance referral flows and asset utilization.

Our ambition is to expand the network with the addition of 5 to 8 new facilities, and that includes both hospitals and clinics by the year of 2032. On digital and operational excellence, we will continue to investing in automation, digital health solutions, and data-driven systems to improve productivity, strengthen margins, and enhance our overall patient experience across the platform.

All of this will be enabled by continued investment in talent development, clinical excellence, and a patient-first culture, ensuring we build the capabilities required to deliver sustainable long-term growth. On execution, we intend to sustain growth beyond the new hospital openings as we capitalize on multiple growth levers within our platform.

If you can see in the Malaz branch and Rawabi branch with a decent occupancy rate, but still with further room to increase the occupancy, and as well diversify the patient mix, focus more on acute patients with less reliability on long-term care patients. That is part of the operational excellence that we intend to do with our existing facilities, as well as the price renegotiation with the insurance companies.

The overall capacity, as mentioned, is 83%, with an approximate uplift of 10%, we can accommodate higher patient volumes without significant incremental capital investments. The average length of stay is also improving, which has declined to 8.5 days in the fourth quarter.

That stays enhanced throughput to increase the available bed days and support incremental admission within the same infrastructure. Now I would hand over to Jaz to walk you through the financial review in more detail.

Thank you, Dr. Abdulaziz.

Thank you, everyone, for joining us. Turning to our full year operational performance, 2025 reflected a strong momentum across the network, with total patient volumes rising 33% year-on-year to 985,000 patients, reflecting the full year impact of Al Salam Hospital and sustained volume growth at our legacy facilities.

Outpatient visits grew 32% year-on-year, with Rawabi and Malaz recording year-on-year growth of 13% and 14%, respectively. Inpatient admissions rose 39% year-on-year, with Rawabi and Malaz delivering growth of 9% and 26%, respectively.

During the fourth quarter of 2025, patient volumes rose 15% year-on-year on a like-for-like basis, with Al Salam operational in both periods, reflecting strong underlying demand. Inpatient admissions rose 24% year-on-year, while outpatient visits rose 15% year-on-year.

In line with higher inpatient activity, surgical procedures rose by 23% year-on-year to 24,740 procedures, with Al Salam contributing 4,780 surgeries to account for 19% of total surgeries. However, in quarter four of 2025, the number of surgeries declined 5% year-on-year.

Utilization improved significantly during the year, with group-wide occupancy averaging 83%, up from 68% in 2024, reflecting higher occupancy rates at Rawabi and Malaz at 81% and 88%, respectively, alongside the full year ramp-up of Al Salam. Moving to the financial highlights for the year, we closed the year on a strong note, delivering 24% year-on-year revenue growth to SR 1.6 billion, with fourth quarter earnings increased 9% year-on-year.

The total cost of revenue increased 20% year-on-year, yet declined as a share of revenue to 63% from 65% last year, reflecting improved operating leverage and higher utilization across the network. Cost-to-revenue ratio also improved in the fourth quarter, declining to 64% from 67% same quarter last year.

As a result, gross profit expanded by 31% year-on-year, with a gross margin expanding by 1.9 percentage points to 37% in 2025. Meanwhile, gross profit expanded by 21% year-on-year in the fourth quarter.

The group recorded higher operating expenses, up 49% year-on-year, primarily due to a 25% increase in SG&A expenses associated with expanded operations, strengthened head office capabilities, professional fees related to ongoing strategic initiatives, and improved marketing activities. EBITDA grew 23% year-on-year to 465 million riyals in 2025, with the EBITDA margin sustained at 29%, despite the one-off legal provision reversal booked in the prior year.

Enhanced operating profitability flowed through to the bottom line, with net profit increasing 8% year-on-year to 318 million riyals and delivering a net margin of 20%. The year-on-year comparison reflects a high base effect in 2024 earnings, which benefited from significant one-off reversals amounting to 72 million riyals in total, related to reversals of legal provisions and zakat provisions.

Yeah. Adjusting for prior year one-off reversals, net profit for the year would increase by 43% year-on-year and 71% year-on-year for the fourth quarter of 2025.

Now let's take a closer look at our revenue trends. Our top line performance in 2025 was driven by broad-based growth across all facilities, notably legacy facilities, with the Rawabi and Malaz branches delivering year-on-year revenue growth of 13% and 19%, respectively.

Growth was further fueled by the full year impact of Al Salam and continued expansion at the Relief platform. On a payer level, revenue growth was attributable to higher GOSI referrals, with GOSI remaining the largest contributor at 37% of total revenue and growing 19% year-on-year.

This was followed by MOH and government-related entities, which posted 24% year-on-year revenue growth, contributing 31% of total revenue. Cash-paying segment revenue also grew significantly, rising 48% year-on-year, propelled by ongoing management initiatives to optimize patient mix and expansion of the Relief platform.

The insurance segment delivered 25% year-on-year growth, reflecting sustained demand and stronger uptake of the group's services amongst insurance companies. In terms of revenue by hospital, Rawabi was the primary contributor at 45%, followed by Malaz at 39%, while Al Salam contributed 8%, adding significant scale to the group's overall performance.

Now let's take a closer look at our cost structure and trends. Care Medical's total expenses increased 25% year-on-year to 1.2 billion riyals in the year.

Cost of revenue accounted for 81% of this amount, totaling 1 billion, while operating expenses represented represented the remaining 19%. During the period, cost of revenue rose 25 20% year-on-year.

The rise is mainly due to higher salaries and employee benefits associated with the group's expanded operations, ramp-up of Al Salam, as well as greater medical and consumable spending in line with the rising volumes of surgical procedures conducted throughout the year. Salaries and benefits remained the largest component, accounting for 61% of the total cost of revenue, followed by medicines and consumables at 27% of the total cost.

Operating expenses grew 49% year-on-year, reflecting a 22% increase in G&A expenses due to increased staff costs associated with recent capacity additions and expansion of head office functions. The year-on-year comparison also reflects a non-recurring reversal of legal provisions recorded, which had significantly reduced operating expenses in the previous year of 2024.

Operating expenses also include ECL provisions of 18 million riyals compared to 33 million in 2024, with the decline reflecting improved recoveries in 2025. This is particularly evident in the fourth quarter, with the group booking a 11 million riyal reversal versus 16 million provision in the same quarter of last year.

Let's turn now to our balance sheet and cash conversion cycle. At the end of the fourth quarter, our balance sheet remained solid, supported by a healthy liquidity and a net cash position.

Starting with our asset base, our total assets increased by 11% year-on-year, reaching 2.8 billion riyals. This growth was driven by an increase in current assets, reflecting higher receivables, associated higher activity levels, as well as higher cash and cash equivalents, reflecting strong cash generation.

Total liabilities increased by 6% year-to-date to 922 million riyals, driven by a 10% increase in non-current liabilities, reflecting higher long-term loans and end-of-service benefit obligations. Current liabilities remained largely stable year-on-year, supported by lower trade payables owing to faster supplier payments.

Turning to our working capital metrics, DSO increased 4% year-to-date to 158 days. Meanwhile, days payable outstanding decreased to 95 days from 112 days, and days inventory outstanding shortened to 71 days.

As a result, the conversion cycle lengthened to 134 days compared to 124 days at year-end of 2024. It is worth highlighting that we have received 150 million riyals of payment subsequent to the year-end up to mid of February from GOSI and Ministry of Health.

We ended the year with a net cash position of 15 million as of December 31st, 2025, compared to 79 million at 2024 year-end, reflecting changes in the group's liquidity mix. I will now provide an overview on our receivables management trends during the year.

Trade receivables grew by 27% year-to- year-on-year to 1.2 billion riyals at the end of the fourth quarter. This increase is consistent with revenue growth and higher activity levels, but also reflects slower settlements versus the prior year.

The increase was primarily driven by higher balances from insurance providers and MOH and related government entities. The most notable increases were recorded in the insurance segment, which rose 41% year-to-year, and MOH and government segment, which grew 36% year-on-year.

Our receivable portfolio remains well-diversified across payer segments and maintains a balanced aging structure. We continue to actively manage receivables aging while enhancing collection collection efficiency and strengthening our cash conversion cycle.

Moving to our cash flow, our net cash flow from operations improved significantly in 2025, reaching 154 million riyals compared to 245 million riyals last year. The year-on-year decline was primarily driven by higher working capital outflows, mainly reflecting an increase in receivables in line with the group's growing operations.

Working capital outflows rose to 315 million riyals, reflecting increased working capital needs, mainly due to higher trade receivables. Our capex totaled 131 million riyals, related to capacity expansion and facilities ramp-up, as well as expenditure for Al Narjis Hospital, which had commenced construction earlier in the year.

Net cash used in financing activities amounted to an outflow of 59 million riyals compared to an outflow of 97 million riyals in the comparative period, driven by higher repayments of long-term loans and lease liabilities. As a result, Care Medical recorded a net increase in cash and cash equivalents of 216 million riyals in 2025.

Our cash reserves stood at 480 million riyals as of December 31st, 2025, positioning us well to support our ongoing operational growth and strategic expansion initiatives. With this, we conclude our presentation.

We're now happy to take your questions.

Thank you very much. For all participants, please, if you wish to ask questions, either send them through the chat or you can use the raise hand function.

We'll start with questions from Hikmat. Please introduce yourself, limit yourself to two questions, and go ahead, please.

Hello, am I audible?

Yes, you are.

Yes.

Yes, thank you. Thank you, gentlemen, for the presentation.

Just two questions from my side. The first one is regarding GOSI's revenues.

Basically, if I look at Q4 2025 GOSI revenue, it represented an almost 10% decline on a quarter-over-quarter basis, and it's the lowest quarterly revenue in GOSI throughout 2025. If you can shed some light on the reasons in the decline in GOSI's revenues, because you were consistently citing higher referrals and volumes from GOSI.

I would just like to understand what's the source of the decline. Is it pricing has been revised downward massively, or there are other reasons for the decline?

My second question is regarding your revenue per outpatient visit. If I look at the numbers, it has been declining for the three consecutive quarters, and this is the lowest number in 2025.

Can you shed some light on the reasons behind the consistent decline in the revenue per outpatient visit? That would be very helpful.

Thank you. Thank you for the question.

For GOSI, yes, we've witnessed I think it was an 8% decline in the revenue. There was also a decline in the number of cases, the visits, the volume of patients as well.

However, it's much lower than the decline in the revenue. We don't have a good explanation, but what we can tell you is that what we attribute the bigger decline in revenue compared to the volume is that the case mix has changed, and we were seeing less complicated cases or complex cases.

That's part of it. We still maintain an excellent relationship with GOSI.

We still are fully engaged with them. We had delegates visiting us on a regular basis.

The last one was a couple of weeks ago where they're happy with the quality of care, the KPIs that we have set up to monitor the quality of service that's provided to their patients. There hasn't been any changes in that, and the prices haven't changed as well.

The prices remain as they were since the last adjustment that was made in 2018. That's related to the first part of your question.

The second part, Jaz?

Yeah. The second question was the average outpatient revenue.

Since we had started improving Al Salam, the volumes have increased significantly. Now the issue that we inherited in Al Salam is that the pricing, the insurance contracts, are very low-priced and also carry higher discounts.

Now, luckily, almost all of the contracts are renewing in the year of 2026. We have started our conversations with the insurance companies to revise the pricing.

Now, because of the increased volumes in Al Salam and the negative impact of the lower prices, you would see the average revenue per patient on outpatient visits declining. It should improve once we have revised.

It's not an impact of case mix? It's only the reason because of Al Salam?

See, there's always an element of case mix, definitely. Yes, majority of the reason is because of Al Salam volume increase and their low prices.

Okay. For the GOSI, it's mainly volume and surgery case mix, no pricing revision?

Correct.

It is absolutely volume and

Very clear. case mix.

Really clear. [Foreign language] Congratulations on the results.

I would like to remind you that the Al Salam operates in a class C network as opposed to Rawabi and Malaz, which are in the B-plus network.

Yes, yes. Very clear.

All right. Very clear.

Thank you, gentlemen. [Foreign language] Thank you.

Thank you. We'll take our next questions from the line of Chiradeep Ghosh from SICO.

Please unmute yourself and go ahead.

Hi, this is Chiradeep Ghosh from SICO Bahrain. A couple of quick questions.

First one is, your fourth quarter used to be usually a stronger quarter, basically fourth quarter, first quarter used to be on the stronger side. On the revenue side, we're still seeing some weakness.

If you could shed some more color on that why the revenue was not as strong as, say, third quarter '25, that would be my first question. Second one is, the market seems to be getting a little bit nervous with the rising receivable.

I know you are attributing it to higher revenue, but we want to get some more comfort on the receivable side of it, or do you see any concern from that? Would there be any impairment related to that?

These are my two questions.

Jaz, do you want to start with the receivables?

Okay. I'll start with the receivables bit, right, and then Dr.

Abdulaziz will shed some light on the revenue. Now receivables, yes, they are up, but there are some very good reasons behind it.

For the insurance companies, yes, they have been pushing for higher rejections to compensate for their losses. However, we have been adamant with our partners that we don't want to accept higher rejections because for some other reasons, which is not related to our claims or the integrity of our claims.

Yes, it did take some time for us to negotiate those settlements, and it's an ongoing process. You would have seen reversals in quarter four against ECL, and you will also see similar reversals in quarter one as well, apart from the usual charge that comes for the ongoing business that is there.

Personally, we are not worried about these receivables. We continue to enjoy good relations both with the government entities and the private sector.

As I mentioned during my presentation as well, we have, subsequent to year-end, received 150 million riyals from both MOH and GOSI combined. I hope that answers your question.

Regarding the strong quarter four?

Yeah. You're right in terms of the strongest performance, it's usually quarter one and quarter four.

For quarter four, we have seen growth in the insurance businesses, and that's because, with quarter four, you don't have so many time offs, vacations, Eid, summer holidays, etc. We've seen growth in the insurance sector.

There was a decline in GOSI, and we have talked about it, where we cannot provide a good explanation, but other than we believe that sometimes things go through cycles. This is probably just a one-off decline.

Far in this year, we've seen good signs that this is not a trend that will carry on.

Okay. Perfect.

That's all from my side. Thank you very much.

Thank you. We'll take questions from the line of Abdullah Aamir from Al Jazira.

Please unmute yourself and go ahead.

Assalamu alaikum. Am I audible?

Yes.

Okay. Good afternoon, everyone, and many congratulations to Care management for delivering such an exceptional results for 2025.

I have just two set of broader questions. First one is related to top line growth.

What level of top line growth you are expecting to achieve in the next two years, especially considering the higher occupancy level of 80, 85%? With regards to my second question, it is related to gross margins.

Since company gross margins remained at 36% throughout the year, but since you have mentioned that Al Salam Hospital contracts were renegotiated completely, should we expect some improvement in gross margins due to renegotiations of contracts with the insurance for Al Salam Hospital?

Yes, thank you for your question. We're confident that there will be a top line growth in our existing facilities.

The reason is we're already engaging in discussions with the MOH for the prices of Rehab referrals in Juwar, as well as the insurance companies for our legacy facilities, Rawabi and Al Malaz, plus Al Salam prices increase. There will be also some bed expansion in Al Salam.

We're planning to add 20 beds. Construction is ongoing, and that will happen probably by the quarter end or in quarter two.

Add to that that there will be a review of the cases mix, and we've done this two years ago when we lost or we didn't continue with the contract of the National Guard. We were able to maintain the business by focusing on more acute cases, GOSI patients, MOH referrals.

We believe that we can review the case mix as well. We're already working on reducing the length of stay and improve on the bed turnaround rate.

If you put the operational efficiencies in terms of reduction in the length of stay, increase in the occupancy rate from 80-plus to 90-plus, plus the Al Salam new beds, plus we're planning to add new services as centers of excellence in Rawabi and Al Malaz, like IVF and others, that will also improve on the operational efficiencies of the existing facilities. Now,

regarding your question on margins, the contracts are still under negotiation, they have not been renegotiated as yet. However, once we do have the negotiations finalized and the new contracts are signed, yes, we do expect profitability to be positively affected.

Just a quick follow-up. Other than the contracts, the ongoing increase in patients admissions and overall efficiency measures you have taken, should you expect some margins improvement from this kind of measures in 2026?

Definitely. See, our aim has always been to maintain and improve on our margin, and I think the management has delivered on it in the past few years.

That is always our target, but it's not always under our control. The kind of patient you receive, but that is the target, yes.

Okay. Thank you very much.

Thank you.

You're welcome.

Thank you. We'll take questions from the line of Ahmed Es'haqi.

Please unmute yourself and go ahead.

Hi. Am I audible?

Yes, you are.

It's Ahmed Es'haqi from SICO Bahrain. I have a couple of questions.

My first question is related to the Prince Sultan contract. I just wanted to have an idea, if we exclude the Prince Sultan contract from your total utilization, what would the utilization be, just to have an insight?

If the Prince Sultan contract was not renewed, how much additional capacity would the legacy hospitals and Salam Hospital have? This is one question.

My second question is related to the insurance pricing. How are the current negotiations going, and what kind of pricing increase are you expecting?

Will it be a flat increase on insurance pricing or will it be on selected procedures? One last question, if you could shed a light on the Jeddah expansions.

You've mentioned the Western region expansion, but do you mean you're planning to launch a hospital in the Jeddah land you currently own?

Thank you for your question. Regarding the number of patients for the military hospital contract, it's similar to the contract that we had in the past with National Guard.

Currently we have 180 patients. It goes up and down, but in the range of 180 to 200 patients.

Also we're focusing on increasing the number of patients under that contract who are ventilated. That means that there will be a price increase for a selected number of patients.

We would accept now more ventilated patients rather than the usual long-term care patients. That's for the first part of your question.

The second part was related to

the insurance company, how much We're not going on a blanket increase, and we're not disclosing what our target is because the contracts are still under negotiation, yeah. However, yes, we are targeting our most frequent services and procedures that we provide for our partners.

It's going to be a targeted approach. Now regarding clarity on our Jeddah expansion, Naseer will be able to explain better.

If you recall, when we've had this conversation in the past, in Riyadh we have quite a sizeable integrated health care network, and based on our strategy refresh, that's what we foresee us going towards in Jeddah. Yes, as a lynchpin of this integrated network, we will need to have a multispecialty greenfield hospital in Jeddah.

The answer to your question is yes, and we will come back with more details as we go through the planning cycles of this.

Okay. Thank you.

Just one more question, if I could add. Just in the first two months of 2026, how have you seen GOSI patients flow or any revenues as of now, our patients, compared to the fourth quarter?

Is patient growth better than expected?

The trend has been positive. The numbers and the value of the business, you can say it reaffirms our thinking that quarter four was not a trend, right?

We are seeing positive indicators that we believe this will recover.

Okay. Thank you and all the best.

We're talking about January here only. We have to understand that we will have Ramadan and Eid holidays during February and March.

Sounds good. Thank you.

You're

welcome.

Thank you. We'll take questions from the line of Ranujan from Dhurwa.

Please unmute yourself and go ahead.

Hello, am I audible?

Yes, you are. Please go ahead.

Thank you very much for the presentation and also taking our questions. I just have one brief question from my side.

If you look at the volume growth you have seen over 2025, there has been some noise in that number, especially with regards to the additional patients coming from the Prince Sultan Medical City and also Al Salam first time consolidation. What would be more of that like-for-like volume growth, which sort of better reflects the secular growth trends?

Is that it? Sorry, that's the only question you have?

On a like-for-like basis, because Al Salam we started consolidating in quarter four of last year, right? On full year basis, we don't have it?

Okay. We'll have to get back to you on that.

I don't have the number handy. If you can drop us an email, I will respond to you after the session.

The military hospital?

In the military hospital, we have on average 180 patients.

It started

in mid-July of last year, '24, but the ramp-up completed in September late.

Okay. If we look at the outpatient numbers, the growth in that, for example, I think the fourth quarter it was around 15%, that will be more closer to that like-for-like growth number?

Yes. Exactly.

Okay. Thank you very much.

You're welcome.

Thank you. We'll take a couple of questions from the chat.

Rahaf from Hassana starts with, out of the 100 beds you have at Salam right now, how many are operational? When you said you're going to add 200 beds sorry, 20 beds on top of them, is this beds on top of the licensed ones or you just have some operational ones being increased to meet The

100 beds now are fully operational today. The 20 beds will be additional to the existing 100 beds.

The only thing is that we have to get the license for them, and it's probably going to be early on quarter two of this year. Ahmed, did I get the question?

Yeah, 100% no, 100% clear. Christine is asking two questions.

One of them has already been answered, but I'll read out the two questions in case you want to add anything. When should we expect revision of insurance prices across the group?

That's one. Two, could you please repeat the receivables amount collected year-to-date?

Okay. The insurance contracts are up for renewal throughout 2026 for Al Salam.

For Care legacy hospital, Rawabi and Malaz, we have one large contract which expires in end of January. We are negotiating the final details and waiting to sign the new contract.

The other large contract is up for renewal end of June of this year. Yeah?

Okay.

What else was there?

The second part was, could you please repeat the

Receivables,

yeah.

Receivables up to mid of February of 2026, we have received 150 million riyals from MOH and GOSI.

Okay. How much lower are the prices at Salam compared to your legacy hospitals, if you can provide a wide percentage?

It's not comparable because both operate in a different network class. Rawabi and Malaz are B-plus, Salam is C.

There is generally a significant gap between correctly priced facilities as well. The gap is significant, definitely.

We're not comparing with our legacy facilities, we're comparing it to other players in the market which are operating in the same class C network.

Understood. This question has already been answered.

Someone wants you to repeat what you were saying about insurance companies trying to increase the rejection rate. I'm not sure if I got this correctly.

Yeah. When we were negotiating with insurance companies, 2025 has been a tough year for the insurance companies, and they've incurred losses at other hospitals and providers, yeah?

When it comes to negotiations, our aim this year was to reduce rejections. However, they wanted to at least maintain or increase rejections, right?

Our negotiations with the insurance companies were protracted, and so it took us some time. That was the comment, that they wanted to increase rejections while we wanted to maintain or reduce rejections.

I hope that answered the question, Ahmed.

Understood. We have received a couple of questions on margins in the next couple of years.

Do you have a certain target for them, or if you cannot provide a granular target, would you say that at least until Narjis opens the target is to improve them from the current level or should they be the same, etc.? See,

definitely till Narjis opens, obviously, without any M&A coming in, our aim is to maintain and improve our margins, right? We will be investing in our pipeline, we're investing in our people.

As the group grows, we are in a growth stage, right? We do expect to make investments in our existing facilities and people as well.

Yeah? Overall, we don't expect them to be significant, and our target is to maintain or improve our margins.

Understood. I'll go back to the raise hand function.

Please, if you've already answered or had your question being answered, please lower your hand, otherwise I'll open the mic for you again. We'll take questions from the line of Madhu from Rajhi.

Please unmute yourself and go ahead.

Thank you, Ahmed, for the opportunity. Madhu Appissa from Al Rajhi Capital.

Two questions I have. One is on the strategy refresh.

You planned to add 5 to 8 facilities. Just wanted to know a bit more details on this.

How much would be organic and inorganic, and does it include Narjis? What would be the regional focus?

Would it be just Riyadh and Western region, or do you also have plans to get into Eastern part of the country? The last is related to the patient category, would it be similar to what you have now, which is class B-plus and class C, or would it be more towards VIP and A?

That is question number one. Second is related to Al Salam Hospital.

Could you please share more details around the revenue mix, how much is insurance and cash, and do you currently treat any GOSI and MOH patients at Al Salam? These are my two questions.

I'll go for the strategy question first. The 5 to 8 facilities does not include Narjis, these are facilities excluding Narjis.

In terms of details, this is going to be a mix of both organic and inorganic, meaning thereby that this will have greenfield expansions of both hospitals and clinics, as well as any and all M&A that goes into play here. As far as the regional focus is concerned, we revisited our strategy and we looked at quite a lot of the details about the geographic catchments.

For now, our focus remains to be on the Riyadh center as well as the overall Western Province. However, if anything comes up in the Eastern Province which is of strategic benefit, then we'll definitely consider it.

As far as our active search is ongoing and active investment efforts are ongoing, those are limited to the geographies that I mentioned. The other part of your question was around the segmentations.

Sorry, were you commenting? I can hear some background noise.

Anyway, so as far as the segmentation is concerned, we are focusing primarily on the current segment that we play in, with a view to pivot into class A, VIP as and when if right opportunities are available. For example, Narjis is our foray into the premium segment.

However, the next greenfield that we will look at in Jeddah is going to be where we play, which is class B-plus.

For your second question about the case mix in Al Salam, 50 to 60% is insurance patients, 10% is cash, GOSI and MOH is about 30% of the case mix, and the remaining will be some patients from the military hospital long-term contract, anywhere between 5 to 10%. Does this answer your question, Madhu?

Sorry, I was on mute. Yes, it does.

Just one follow-up related to strategy refresh. Is it possible to share what is the budget for this expansion plan, the total budget, a ballpark number?

Madhu, we have not been disclosing future plans, capex spends, etc., but I think you are familiar with our balance sheet capacity, you are familiar with the cash that we have on hand, and I think we have stressed that our intent is to deploy up to the maximum of our resources to drive shareholder growth, I think you can do an extrapolation from that.

Sure. One last question.

There was a decline in salaries in quarter four compared to quarter three. Any particular reason, 10 million decline in salaries in COGS?

There's some reclassification for head office costs, which was not correctly classified last time. The other bit is just people going on vacation, it's just cyclical.

Okay. Thank you.

That's all.

Thank you. We don't have anyone raising their hands again.

I'll just go through the chat, make sure that everything has been answered. Sorry, one second.

Hikmat has follow-ups, Hikmat, please unmute yourself and go ahead.

Thank you, Ahmed, for taking my question again. Just a follow-up, gentlemen, on the opex.

I noticed a quarter-over-quarter increase in the opex. Is it mainly due to the reclassification of employee costs, or is there some other reasons?

Should we expect it more of a recurring in nature, the incremental 15 million, going forward, or it's just maybe a one-off in employee costs and professional fees? Just if you can shed how much capex incrementally over the next let's say two years will be deployed by the company, including Al Narjis and any incremental capex related to Al Salam, if needed, due to the addition of 20 beds?

That would be very helpful. Okay.

The reclassification is permanent, going forward you will see this salary cost in G&A to be a bit higher as compared to the cost of revenue. Second, the normal level is difficult to say for Care at the moment because we are in a growth stage.

We are going to be engaging with consultants and advisors whenever an opportunity arises that we need evaluating. Yeah?

You will continue to see elevated expenditures as and when such opportunities come up. Now, as far as capex is concerned for Narjis, we've already disclosed that the two phases are going to be around 1.4 billion in total.

Phase one is close to a billion, which is the first 200 beds, which are going to come online early of 2028. That expenditure to date, until 2025, we have spent around 80, 90 million riyals.

However, bulk of the remaining 900 million will be spent in 2026 and 2027. Regarding our maintenance capex, you can consider a range average of 4 to 5% of our net revenue as an annual maintenance capex.

Other than that, Al Salam expansion, we don't consider that to be material. It's just a renovation.

We're just converting regular beds into ICU beds. That's that.

Anything other than these existing facilities, it's difficult to disclose right now. Okay.

Just to follow up regarding the opex, if you're shifting from cost of sale or cost of revenue into opex, should we expect gross margin to go up in 2026, but on an EBIT level, we will see it more or less the same, or?

You will see similar to quarter four, not the full year, but quarter four margin is a good indicator of future margins.

Okay. Clear.

Thank you. You're

welcome.

We'll take questions from the line of Faisal Bin Zarah. Please unmute yourself and go ahead.

is different, since 2024 included multiple acquisitions and different asset base currently. I just maybe want you to shed further light in terms of why did we notice a sudden drop in revenue per inpatient?

Is there a big discrepancy in pricing in GOSI's contract versus other revenue streams? Because we noticed it in Q4, and it impacted the full blended year average.

Faisal, I'm not sure we heard the full question. I think you muted or for some reason.

If I can understand correctly, you're talking about the decline in GOSI and whether it's related to price adjustments,

sah? Average revenue per inpatient.

I think your question was that why is the average revenue per inpatient low in Q4? Is it because GOSI has a higher revenue per patients?

Correct? That is correct.

GOSI has a higher average revenue per patient, partially because their prices are good, and secondly, because they are almost always a surgical case. When you're having a surgical case, it's a complex multiple surgeries, you are going to earn more on average per patient.

Okay. Maybe just a follow-up question here.

Since you've described Q4 as a one-off or an anomaly in terms of volume in terms of GOSI contract, could we anticipate that the inpatient revenue for the nine months is your new run rate post the acquisitions?

See, firstly, on GOSI, what we are trying to say here is this that we don't have any indications, nor do we have any feedback from GOSI that would suggest that this is the new norm, right, Q4. Q4 is an outlier.

We think it's just cyclical, nothing else, right? It's not a trend.

You can say the first nine months is a good indicator of our run rate, yes.

Great. Hey, thank you very much.

You're welcome.

Right, we'll take our final questions. It's actually a follow-up from Ranujan.

Please unmute yourself and go ahead.

A couple of brief questions from me. First is regarding Al Salam, do you have any plans to improve the facility to a B grade or it'll remain as a C grade facility?

The second question is again on insurance and the cash patients, any new initiatives that you're taking to improve the revenue contribution from these segments or you're sort of satisfied with the level of patient growth that you're seeing from these two segments?

Regarding your first question for Al Salam, no, we don't have plans yet to upgrade the network of Al Salam from C to a B. They have a good clients and they have built their brand and loyalty.

There is room to improve the pricing in the existing network. We don't have any plan to increase it to a B network.

The second question? Your second question was?

This is regarding the insurance and cash patients,

Are we happy with the current growth? Definitely, we want to improve our share of insurance and cash.

Now average revenue for insurance patient is lower than MOH and GOSI, but these are acute cases. We do want to gain market share with insurance patients because they have a choice.

They are coming to us by choice rather than being referred to by either MOH or GOSI. Definitely we want to grow our market share with them, and that is evident by how much we increase our selling and marketing activities as well on an annual basis.

Just this one final question, could you disclose your inpatient to outpatient conversion ratio?

The conversion ratio that we have disclosed, it is on average 3 to 4%, right? In ER, obviously it's higher, but on a blended basis, you should consider 3%, 3.5% as the average conversion ratio.

Okay. Thank you very much.

You're welcome.

Thank you. We don't have any questions.

I'm not sure if you have concluding remarks, but at least from my end, I would like to thank Care's management and to all participants that joined today.

Thank you, Ahmed, and thank you, everyone, for your attendance. We're very optimistic and hopeful that Care will continue to deliver as per what we have been doing in the past few years.

We have a new strategy refresh, and we're very excited that it's going to be another milestone for Care future expansion and growth. Thank you, everyone, and Ramadan Mubarak.

Thank you. This concludes today's earnings call.

Have a good rest of the day, everyone.