French retirement home company Orpea issues profit margin warning
PARIS, September 12 (Reuters) – The French nursing home company Orpea’s, in debt ORP.PA Financial performance is expected to decline further in the second half of the year, he said on Monday, perhaps amplified by soaring energy costs.
Orpea, which has been criticized for the way it runs its homes and has various legal proceedings pending in France, said its operating profit margin on first-half profit before interest, tax, depreciation, amortization and restructuring or rent (EBITDAR) fell to 18.5% from 24.9% a year earlier.
“In this context, and depending on the recovery of its occupancy rate, Orpea’s EBITDAR margin in the second half of 2022 could be lower than the level observed in the first half,” the company said in a press release.
This drop in margin is partly the result of a substantial reduction in compensation related to COVID-19 received in the various countries where the group operates. Orpea also faced higher food, energy and salary costs, while the rates charged to patients and residents changed little.
Orpea will announce its fully audited half-year results on September 28.
The group’s refinancing plan, meanwhile, is proceeding as planned, CFO Laurent Lemaire told reporters without further details.
Orpea said in June that an audit found evidence of financial wrongdoing but did not support all the allegations against the company.
A 62-page report from auditors Grant Thornton and Alvarez & Marsal this year said Orpea had inflated labor costs and made suspicious large payments to third parties.
(Report by Dominique Vidalon Editing by Tassilo Hummel and David Goodman)
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