Restructuring costs, including redundancy payments, contributed to profits at the country’s largest privately owned hospital group plummeting by 97% last year to €155,000.
Newly filed accounts for the Cork-based Bon Secours Health Systems Ltd show that the group’s profits last year decreased sharply by €4.96m from €5.1m to €155,000. The profit dive came after revenues reduced by 1% from €223.7m to €221.34m.
The group employs 2,500 personnel, along with 350 leading medical consultants, in privately run hospitals in Cork, Dublin, Galway, and Tralee; and provides care to 200,000 patients annually.
Exceptional costs of €1m last year — made up of €780,000 in restructuring costs and €276,000 in legal and settlement costs — reduced the group’s operating surplus last year from €1.86m to €810,000. Net interest payments of €655,000 reduced the group’s profits further to €155,000.
In a statement yesterday, the group said: “2014 was a very challenging year for Bon Secours. The significant reduction in the operating surplus was a direct result of the group having to absorb price reductions from insurers together with volume reduction due directly to the attrition in the insurance market place.”
However, it added: “The group successfully implemented a number of initiatives to reduce its cost base and increase revenue in late 2014.”
These measures include the development of urgent care/rapid access services at all hospitals and increasing awareness and reputation of the group’s hospital services through new marketing, business and service development initiatives.
According to a spokeswoman: “These initiatives have laid an important foundation for future growth, with a strong recovery already evident in 2015 with patient volumes for the first half of 2015 increasing by 4% on the same period in 2014.”
She added that having completed a major expansion at Tralee Hospital, the board is now proceeding with plans for the construction of a €60m development at its Cork facility.
On the 2014 performance, the directors’ report states that the sector has endured six consecutive years of price reduction from health insurers, which has materially eroded margins earned
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