MedLife set to expand private clinic network

MedLife, a business created 12 years ago with just one medical office in Bucharest, will enter a new phase in 2010 when turnover is forecast to exceed 50m euros, double this year’s level.

“Think big” is the principle Mihail Marcu, a stakeholder in MedLife, is applying to one of the most powerful operators of private clinics and hospitals in Romania and the entrepreneur is following the same principle to make investments in other industries as well. “MedLife’s bases were laid in 2006 by pediatrician Mihaela Cristescu, my mother,” says Marcu in an interview with ZF. Marcu, 38, is a Mathematics Faculty graduate and before joining the family business he worked as a vice-president with RoBank between 2001 and 2004. When he came to the helm of MedLife, the company had 1.5m-euro turnover and was one place behind the top ten operators in the industry. A key moment in MedLife’s evolution was the end of 2006, when IFC took over 20% in stock for $5m. Shortly after the deal with IFC, MedLife launched Life Memorial, the largest private hospital domestically, in the wake of an investment worth above 10m euros. “Efforts to support the hospital are very big because it derived operating losses in the first year. At present, the business has just started to surface, but it’s very difficult to maintain despite the huge number of ambulatory patients,” explains Marcu. In parallel, MedLife also stepped up expansion on the segment of clinics, and also plans to open smaller hospitals outside Bucharest. All these investments have been felt at the level of net income and EBITDA. Thus, operating income margin reached 15-16%, compared with 22-23% before the hospital was opened, “which is still bothering us”. “We’d like to shift to more profitable operations for a period,” says Marcu. “(…) At any rate, we’ll focus more on clinics”. Amid the launch of new clinics and hospitals, MedLife’s turnover is scheduled to reach 30m euros in 2009, from 22m euros in 2008, while in 2010 revenues could top 50m euros. At the level of the EBITDA margin, the target was set at 18-20% in 2010, hard to reach as “turnover remains our main objective”.