Q2 2026 Burjeel Holdings PLC Earnings Call

August 6, 2026

Operator 2: Hello, ladies and gentlemen, Welcome to Burjeel Holdings Q2 and H1 2026 Earnings Conference Call. Today's call will be hosted by Burjeel Holdings Chief Executive Officer, Dr Shamsheer Vayalil, and Chief Financial Officer, Mr Muhammed Shihabuddin, who will provide an overview of the group's financial and operational performance, followed by a Q&A session. Please refer to the disclaimer on the second slide for important information regarding forward-looking statements and the use of historical data. I will now hand the call over to Dr Shamsheer. Please go ahead, sir.

Operator: Hello, ladies and gentlemen, Welcome to Burjeel Holdings Q2 and H1 2026 Earnings Conference Call. Today's call will be hosted by Burjeel Holdings Chief Executive Officer, Dr Shamsheer Vayalil, and Chief Financial Officer, Mr Muhammed Shihabuddin, who will provide an overview of the group's financial and operational performance, followed by a Q&A session. Please refer to the disclaimer on the second slide for important information regarding forward-looking statements and the use of historical data. I will now hand the call over to Dr Shamsheer. Please go ahead, sir.

Speaker #1: Hello, ladies and gentlemen, and welcome to Burjeel Holdings Q2 and Q1 2026 earnings conference call. Today's call will be hosted by Burjeel Holdings CEO, Dr. Shamshir Vijay, and CFO, Mr. Mohammad Shihabuddin, who will provide an overview of the group's financial and operational performance followed by a Q&A session.

Speaker #1: Please refer to the disclaimer on the second slide for important information regarding forward-looking statements and the use of historical data. I will now hand the call over to Dr. Shamshir.

Speaker #1: Please go ahead, sir.

Shamsheer Vayalil: Good evening, everyone, and thank you for joining us today. I would like to begin by recognizing our extraordinary team of more than 14,000 healthcare professionals. During H1, they cared for over 3.7 million patients across our network. Their dedication, compassion, and commitment to clinical excellence remain the foundation of everything we achieve. Turning to our performance, H1 2026 demonstrated the resilience of Burjeel's integrated healthcare platform. Despite a challenging operating environment, revenue increased by more than 4%. Recurring EBITDA grew by nearly 25%, and the core net profit almost doubled. These results reflect disciplined execution, improving operating leverage, and continued margin normalization across our network. Momentum strengthened during Q2. Patient volumes improved, elective and complex procedures recovered, and our recently opened facilities continue to increase their activity and efficiency.

Speaker #2: Good evening, everyone, and thank you for joining us today. I would like to begin by recognizing our extraordinary team of more than 14,000 healthcare professionals.

Speaker #2: During the first half of the year, they cared for over 3.7 million patients across our network. Their dedication, compassion, and commitment to clinical excellence remain the foundation of everything we achieve.

Speaker #2: Turning to our performance, the first half of 2026 demonstrated the resilience of Burjeel's integrated healthcare platform. Despite a challenging operating environment, revenue increased by more than 4%.

Speaker #2: Recurring EBITDA grew by nearly 25%, and the core net profit almost doubled. These results reflect disciplined execution, improving operating leverage and continued margin normalization across our network.

Speaker #2: Momentum strengthened during the second quarter, patient volumes improved, elective and complex procedures recovered, and our recently opened facilities continued to increase their activity and efficiency.

Speaker #2: This gives us the confidence in the direction of the business and the quality of our underlying growth. Our ambition extends beyond the short-term financial performance.

Shamsheer Vayalil: This gives us the confidence in the direction of the business and the quality of our underlying growth. Our ambition extends beyond the short-term financial performance. We are building a healthcare platform focused on advanced clinical care, research, medical education, and AI-related technologies. With an experienced leadership team and a resilient operating model, we believe Burjeel is well positioned to create sustainable long-term value. Let me now highlight some strategic milestones. We successfully completed our inaugural $500 million Sukuk issuance. The transaction was 3.2 times oversubscribed, with 61% allocated to international investors. It demonstrates the global confidence in Burjeel, broadens our access to international capital, and provides flexibility to execute our long-term strategy. We also strengthened our position in complex care through our collaboration with Roswell Park, advancing oncology, physician training, research, and internationally aligned clinical protocols.

Shamsheer Vayalil: This gives us the confidence in the direction of the business and the quality of our underlying growth. Our ambition extends beyond the short-term financial performance. We are building a healthcare platform focused on advanced clinical care, research, medical education, and AI-related technologies. With an experienced leadership team and a resilient operating model, we believe Burjeel is well positioned to create sustainable long-term value. Let me now highlight some strategic milestones. We successfully completed our inaugural $500 million Sukuk issuance. The transaction was 3.2x oversubscribed, with 61% allocated to international investors. It demonstrates the global confidence in Burjeel, broadens our access to international capital, and provides flexibility to execute our long-term strategy. We also strengthened our position in complex care through our collaboration with Roswell Park, advancing oncology, physician training, research, and internationally aligned clinical protocols.

Speaker #2: We are building a healthcare platform focused on advanced clinical care research, medical education, and AI-related technologies. With an experienced leadership team and a resilient operating model, we believe Burjeel is well positioned to create sustainable long-term value.

Speaker #2: Let me now highlight some strategic milestones. We successfully completed our inaugural US dollar 500 million sukuk issuance. The transaction was 3.2 times over subscribed, with 61% allocated to international investors.

Speaker #2: It demonstrates the global confidence in Burjeel's broadened our access to international capital and provides flexibility to execute our long-term strategy. We also strengthened our position in complex care through our collaboration with Roswell Park Advancing, oncology, physician training, research, and internationally aligned clinical protocols.

Speaker #2: Together with our neuro oncology and sarcoma and bone centers, continued transplant progress, and advances in precision oncology, this reinforces Burjeel's leadership in advanced cancer care.

Shamsheer Vayalil: Together with our neuro-oncology and sarcoma and bone centers, continued transplant progress, and advances in precision oncology. This reinforces Burjeel's leadership in advanced cancer care. We did some strategic alliances with EDGE Group, expands our healthcare ecosystem, and also the Ministry of Family, also that we signed up a very exclusive collaboration to advance the care into the families across the Emirates. Our sports rehabilitation initiative strengthen our presence in Saudi Arabia. We also open new facilities in Dubai Silicon Oasis and Jumeirah, expanding capacity and improving accessibility. At Burjeel Medical City, our transplant program continued to gain momentum with 19 liver and kidney transplants and 15 bone marrow transplants during Q2. We expanded our transplant team, secured Thiqa coverage, and saw growing international demand.

Speaker #2: We did some strategic alliances with Edge Group, Expands our healthcare ecosystem, and also the Ministry of Family, also that we signed up a very exclusive collaboration to advance the care into the families across the Emirates.

Speaker #2: Also, our sports rehabilitation initiative strengthened our presence in Saudi Arabia. We also opened new facilities in Dubai Silicon Oasis and Jumeirah, expanding capacity and improving accessibility.

Speaker #2: At Burjeel Medical City, our transplant program continued to gain momentum with 19 liver and kidney transplants and 15 bone marrow transplants during the second quarter.

Speaker #2: We expanded our transplant team, secured thicker coverage, and saw growing international demand. Burjeel Cancer Institute became the world's first center to administer eczema chemistry.

Shamsheer Vayalil: Burjeel Cancer Institute became the world's first center to administer ACTEMRA, camostat, and this is the generic name in routine clinical practice, enabling earlier and more precise treatment decisions through the ctDNA testing. We expanded specialized services, treated highly complex and rare diseases, and improved patient flow through our pharmacies, which is very specialized. During H1, the group performed more than 45,000 surgeries, including over 500 oncology procedures. Since inception, we have completed 86 multi-organ transplants, 178 bone marrow transplants, and more than 1,075 robotic surgeries. A key milestone in this journey in our partnership with Oracle helped to implement the next generation AI-enabled electronic medical record across Burjeel Holdings, the first of its kind in the MENA region. This is much more than a digital transformation project. It is the foundation of a smarter healthcare platform.

Speaker #2: This is the generic name in routine clinical practice, enabling earlier and more precise treatment decisions through the ctDNA testing. We expanded specialized services, treated highly complex and rare diseases, and improved patient flow through our pharmacies.

Speaker #2: Which is very specialized. And during the first half, the group performed more than 45,000 surgeries, including over 500 oncology procedures. Since inception, we have completed 86 multi-organ transplants, 178 bone marrow transplants, and more than 1,075 robotic surgeries, a key milestone in this journey in our partnership with Oracle Health to implement the next generation AI-enabled electronic medical record across Burjeel Holdings.

Speaker #2: The first of its kind in the MENA region. This is much more than a digital transformation project. It is the foundation of a smarter healthcare platform.

Speaker #2: By bringing together clinical data, artificial intelligence, and workflow automation, we expect to enhance patient safety, improve clinician productivity, reduce administrative burden, and enable more personalized care.

Shamsheer Vayalil: By bringing together clinical data, artificial intelligence, and workflow automation, we expect to enhance patient safety, improve clinician productivity, reduce administrative burden, and enable more personalized care. Over time, this digital backbone will support clinical research, population health management, and operational excellence across our network. These achievements reflect the trust of our patients, the place in us, and the dedication of our teams. We remain confident in our strategy and long-term opportunity. With that, I will now hand over to our CFO, Shihab, to take you through the financial performance in greater detail.

Speaker #2: Over time, this digital backbone will support clinical research, population health management, and operational excellence across our network. These achievements reflect the trust of our patients, the place in us, and the dedication of our teams.

Speaker #2: We remain confident in our strategy and long-term opportunity. With that, I will now hand over to our CFO, Shihab, to take you through the financial performance in greater detail.

Muhammed Shihabuddin: Thank you, Dr. Shamsheer. Let me start with the key operating metrics that underpin our financial performance during the H1 of the year. Patient demand remains strong across both outpatient services and inpatient services. Once again, demonstrating the strength of our network and the growing contribution from the recently opened facilities. Outpatient visits increased by 10% in H1, with the growth accelerating to 12.5% in Q2. This reflected the ongoing expansion of our community-based network and the ramp-up of our newly opened facilities. Importantly, this growth was achieved while adding only 25 physicians since the beginning of the year, bringing our physician base to 1,800 doctors. Inpatient admissions has increased by 8.4% in Q2 and 7.2% in H1, driven by a progressive growth in high acuity specialties including oncology, cardiology, gastroenterology, and critical care.

Speaker #1: Thank you. Thank you, Dr. Shamshir. Let me start with the key operating metrics that underpin our financial performance during the first half of the year.

Speaker #1: Patient demand remains strong across both outpatient services and inpatient services. Once again, demonstrating the strength of our network and the growing contribution from the recently opened facilities.

Speaker #1: Outpatient visits increased by 10% in H1, with a growth accelerating to 12.5% in the second quarter. This reflected the ongoing expansion of our community-based network and the ramp-up of our ur newly opened facilities.

Speaker #1: Importantly, this growth was achieved while adding only 25 physicians, since the beginning of the year, bringing our physician base to 1,800 doctors. Inpatient admissions have increased by 8.4% in Q2 and 7.2% in H1.

Speaker #1: Driven by a progressive growth in high-acuity specialties, including oncology, cardiology, gastroenterology, and the critical care. During this second quarter, we performed more than 24,600 surgeries, up by 7.4% year on year.

Muhammed Shihabuddin: During this Q2, we performed more than 24,600 surgeries, up by 7.4% year-on-year, highlighting the sustained recovery in elective procedures and sustained demand for complex care. Finally, our bed occupancy ratio has gone up to 69% during the H1. While this provides a sufficient capacity to support the future growth, it also highlights the significant earning potential within our existing asset base, as recently opened hospitals and centers continue to mature towards the normalized occupancy level. This combination of accelerating patient volume, improving utilization, and scalable capacity provide a strong operational foundation for the margin expansions that you'll be seeing in the following slide. Turning now to our financial performance. The strong operating trend we just discussed have resulted in another quarter of profitable growth and margin expansion. Group revenue increased by 3.7% year-on-year in Q2 and 4.4% in H1, despite the ongoing impact of the UPP.

Speaker #1: Highlighting the sustained recovery in elective procedures and sustained demand for complex care. Finally, our average bed occupancy ratio has grown up to 16.9% during the first half.

Speaker #1: While this provides a sufficient capacity to support the future growth, it also highlights the significant earning potential within our existing asset base, as recently opened hospitals and centers continue to mature towards the normalized occupancy level.

Speaker #1: This combination of accelerating patient volume, improving utilization, and scalable capacity provides a strong operational foundation for the margin expansions that you will be seeing the following now to our financial performance, the strong operating trend we just discussed have resulted in another quarter of profitable growth and margin expansion.

Speaker #1: Group revenue increased by 3.7% year on year, in Q2, and 4.4% in H1. Despite the ongoing impact of the UPP, on a normalized basis, excluding the UPP effect, revenue grown by 8.6% in Q2 and 9.1% in H1, demonstrating the underlying strength of the business.

Muhammed Shihabuddin: On a normalized basis, excluding the UPP effect, our revenue grown by 8.6% in Q2 and 9.1% in H1, demonstrating the underlying strength of the business. Hospitals remain the primary growth engine. The revenue increased by 5.4% in both Q2, supported by the higher patient volume and recovery of the complex and elective procedures. Medical centers also performed well, delivering revenue growth of 7.6% in Q2 and 8.4% in H1, as recently opened centers ramped up and contributed more meaningfully to the network. More importantly, the revenue growth translated into even stronger earnings. Group EBITDA, excluding one-off items, increased by 35% in Q2 and 24.6% in H1, and EBITDA margin has expanded to 21.7% in Q2, reflecting the disciplined cost management and improving operating leverage. Profitability growth was broad-based across the segment. Hospital segment has delivered another strong quarter of margin expansion.

Speaker #1: Hospitals remained the primary growth engine, the revenue increased by 5.4% in both Q2, supported by the higher patient volume and the recovery of the complex and elective procedures.

Speaker #1: Medical centers also performed well. Delivering revenue growth of 7.6% in Q2 and 8.4% in H1. As recently opened centers ramped up and contributed more meaningfully to the network.

Speaker #1: More importantly, the revenue growth translated into even stronger earnings. Group EBITDA excluding on-off items increased by 35% in Q2 and 24.6% in H1, and EBITDA margin has expanded to 21.7% in Q2, reflecting the disciplined cost management and improving operating leverage.

Speaker #1: Profitability growth was brought based across the segment, hospital segment as delivered another strong quarter of margin expansions, Burjeel Medical City achieved a record EBITDA margin of 26.3%, and medical centers delivered further profitability gains as utilization increased across the network.

Muhammed Shihabuddin: Burjeel Medical City achieved a record EBITDA margin of 26.3%, and medical centers delivered further profitability gains as utilization increased across the network. Yeah, next slide. Starting on the left-hand side of this presentation, the employee cost as a percentage of the revenue declined by 0.4% in Q2, despite adding more than 350 employees over the past 12 months, including 25 physicians since the beginning of the year. This reflects the disciplined workforce expansions with patient volume growth faster than our clinical headcounts. In Q2, the inventory cost declined by 6.8% year-on-year, reflecting the tight procurement controls, optimized vendor agreement, lower consumable intensity, and the net basis recognition of the certain pharmaceutical revenue under the UPP. Expected credit loss provisions declined to 3.3% of the revenue in Q2, primarily reflecting the reclassification of the provisions related to the Burjeel Hospital for Advanced Surgery to an asset impairment cost section.

Speaker #1: Yeah, next slide. Starting on the left-hand side of this presentation, the employee cost as a percentage of the revenue declined by 0.4% in Q2.

Speaker #1: Despite adding more than 350 employees over the past 12 months. Including 25 physicians since the beginning of the year. This reflects the disciplined workforce expansions with patient volume growth faster than our clinical headcounts.

Speaker #1: In Q2, the inventory cost declined by 6.8% year on year, reflecting the tight procurement controls optimized when agreement lower consumable intensity and the net basis recognition of the certain pharmaceutical revenue under the UPP.

Speaker #1: Expected credit loss provisions declined to 3.3% of the revenue in Q2, primarily reflecting the reclassification of the provisions related to the Burjeel Hospital for advanced surgery, to an asset impairment cost sections.

Speaker #1: We expect the provisions remain broadly stable around H1 level around 3.5%. Moving to our heads, these remained well controlled. Other overhead expenses as the share of the revenues increased by 0.8% in H1.

Muhammed Shihabuddin: We expect the provisions remain broadly stable around H1 level, around 3.5%. Moving to overheads, these remained well controlled. Other overhead expenses as the share of the revenues increased by 0.8% in H1. In Q2, however, the ratio has declined 1.8% in Q1. While the year-on-year increase reflect the low comparison base and continue to invest in the digital infrastructure, AI integrations, and medical equipment enhancement. As a result, the EBITDA excluding one-off item has increased by 35% in Q2 with an EBITDA margin expanding to 21.7%. This demonstrates the benefit of scale are increasingly translating into profitability as our newer assets mature. Finally, the core net profit grew by 125% in Q2 and 97% in H1, reflecting the strong operating performance and disciplined management of financing and non-operating costs. Let me briefly explain the difference between the EBITDA excluding one-off items and reported EBITDA.

Speaker #1: In Q2, however, the ratio has declined to 1.8% in Q1. While the year-on-year increase reflected the low comparison base and continued to invest in the digital infrastructure AI integrations and medical equipment enhancement.

Speaker #1: As a result, the EBITDA excluding on-off item has increased by 35% in Q2, with an EBITDA margin expanding to 21.7%. This demonstrates the benefit of scale are increasingly translating into profitability as our newer assets mature.

Speaker #1: Finally, the core net profit grew by 125% in Q2 and 97% in H1, reflecting the strong operating performance and disciplined management of financing and non-operating costs.

Speaker #1: Before moving to, let me briefly explain the difference between the EBITDA excluding on-off items and reported EBITDA. Reported EBITDA in Q2 include 25 million of non-recurring cost pertaining to the depart from the Lee Jang partnership and shutting the operating of physiotherapy unit in Lee Jang infrastructure.

Muhammed Shihabuddin: Reported EBITDA in Q2 include AED 25 million of non-recurring costs pertaining to the depart from the Lijam partnership and shutting the operating of physiotherapy unit in Lijam infrastructure. The particular model was not well received in KSA. Moreover, the AED 72 million is one-off gain were recorded in the Q2 2025, which generated in acquisition of the Medeor Hospital, Dubai. During H1 2026, the operating cash flow increased by 77% year-on-year to AED 405 million, driven by a strong operating profitability together with a significantly lower working capital outflow. In particular, we benefited from the lower cash outflow relating to the receivables and prepayments, although this was partially offset by the lower inflow from the accounts payable and accruals. At the same time, we maintain a disciplined approach to capital deployment.

Speaker #1: The particular model was not well received in KSA, moreover the 72 million is one of gain were recorded in a Q2 2025 with generated in acquisition of the Medior Hospital Dubai.

Speaker #1: During the first half of 2026, operating cash flow increased by 77% year-on-year, to $405 million. This was driven by strong operating profitability, together with a significantly lower working capital outflow.

Speaker #1: In particular, we benefited from the lower cash outflow relating to the receivables and prepayments, although this was partially offset by the lower inflow from the accounts payable and accruals.

Speaker #1: At the same time, we maintained a disciplined approach to capital deployment, the total investing cash outflow declined by almost 59% year on year, to AED 186 million, reflecting the completion of several major investment projects and return to the more normalized level of capital expenditure.

Muhammed Shihabuddin: The total investing cash outflow declined by almost 59% year-on-year to AED 186 million, reflecting the completion of several major investment projects and return to the more normalized level of capital expenditure. Growth CapEx amounting to AED 129 million, primarily supporting our network expansions, while maintenance CapEx remain well controlled at AED 353 million, ensuring our facilities continue to operate at the highest clinical standard. As a result, the free cash flow increased by 37% year-on-year to AED 356 million, while free cash flow conversion improved significantly from 53% to 72%. This demonstrate the increase in the cash generating capacity of the business as our recently opened assets continue to mature and operating leverage improve. The strong cash generation also reinforce our resilient balance sheet, which I will discuss in the next slide.

Speaker #1: Growth capex amounting to 129 million, primarily supporting our network expansions, while maintenance capex remained well controlled at AED 53 million. Ensuring our facilities continue to operate at the highest clinical standard.

Speaker #1: As a result, the free cash flow increased by 37% year on year to AED 356 million, while free cash flow conversion improved significantly from 53% to 72%.

Speaker #1: This demonstrates the increase in the cash generating capacity of the business as our recently opened assets continue to mature and operating leverage improve. The strong cash generation also reinforced our resilient balance sheet which I will discuss in the next slide.

Muhammed Shihabuddin: Our balance sheet remains stronger and provides us a substantial flexibility to support the group next phase of growth. At the end of June, the net leverage remains stable at 1.8x EBITDA, despite the continued investment in network expansions reflecting the increase in the cash generating capacity of the business. A major milestone during the period was successful completion of an inaugural $500 million Sukuk issuance under the newly established program, $1.5 billion Sukuk. Following the transactions, we fully repaid our existing term loan and the majority of our revolving credit facilities. We also significantly extended our debt maturity profile with substantially all outstanding debt now maturing in 2031, which give us a long-term funding base and enable us to support our growth program primarily through the internally generated cash flows. Finally, let me conclude touching on our midterm outlook.

Speaker #1: Our balance sheet remains stronger and provides us a substantial flexibility to support the group next phase of growth. At the end of June, the net leverage remained stable at 1.8 times of EBITDA despite the continued investment in network expansions reflecting the increase in the cash generating capacity of the business.

Speaker #1: A major milestone during the period was successful completion of an inaugural USD 500 million sukuk issuance under the newly established program, USD 1.5 billion sukuk.

Speaker #1: Following the transactions, we fully repaid our existing term loan and a majority of our revolving credit facilities. We also significantly extended our debt maturity profile with a substantially all outstanding debt now maturing in 2031.

Speaker #1: Which give us a long-term funding base and enable us to support our growth program primarily through the internally generated cash flows. Finally, let me conclude touching on our midterm outlook.

Muhammed Shihabuddin: The strong executions and financial performance we delivered in the H1 of the year further we reinforce our confidence in strategy and target we have outlined to the market. We therefore remain comfortable with our guidance across the revenue growth, profitability, and capital allocation and leverage while continue to execute our expansion program in a disciplined manner. With that, we would like to please to open the line for Q&A.

Speaker #1: The strong executions and financial performance we delivered in the first half of the year further we reinforce our confidence in strategy and target we have outlined to the market.

Speaker #1: We therefore remain comfortable with our guidance across the revenue growth profitability and capital allocation and leverage while continue to execute our expansion program in a disciplined manner.

Speaker #1: With that, we would like to please to open the line for Q&A.

Speaker #2: Thank you very much for the presentation. We'll now be moving to the Q&A part of the call. If you're dialed in via the telephone, please press start 2 on your keypad.

Operator 2: Thank you very much for the presentation. We'll now be moving to the Q&A part of the call. If you're dialed in via telephone, please press star 2 on your keypad. That's star 2 on your keypad. Alternatively, you may ask a voice or a text question if you are dialed in via the web. We'll give a few moments for questions to come through. Thank you. Our first voice question comes from Mr. Ankur Khetawat from Arqaam Capital. Please go ahead, sir. Your line is open.

Operator: Thank you very much for the presentation. We'll now be moving to the Q&A part of the call. If you're dialed in via telephone, please press star 2 on your keypad. That's star 2 on your keypad. Alternatively, you may ask a voice or a text question if you are dialed in via the web. We'll give a few moments for questions to come through. Thank you. Our first voice question comes from Mr. Ankur Khetawat from Arqaam Capital. Please go ahead, sir. Your line is open.

Speaker #2: That's start 2 on your keypad. Alternatively, you may ask a voice or a text question if you are dialed in via the web. We'll give a few moments for questions to come through.

Speaker #2: Thank you. Our first voice question comes from Mr. Ankur Ketawat from ARAM Capital. Please go ahead, sir. Your line is open.

Speaker #3: Yeah, thank you. Thank you, Dr. Shamshir, and thank you, Mr. Shahabuddin. And congratulations on strong results, especially on the margin side. My question relates to the receivables.

Ankur Khetawat: Yeah. Thank you. Thank you, Dr. Shamsheer, and thank you, Mr. Shihabuddin. Congratulations on strong results, especially on the margin side. My question relates to the receivables. We have seen receivables increasing a bit in this quarter. We understand that whenever the deal got happened with the insurance company, we were expecting receivables to ease gradually. If you want to throw some more light on what exactly is happening on that front and what should be the trajectory, going forward in terms of the receivables management by Burjeel. That's my first question. Thank you.

Speaker #3: We have seen receivables increasing a bit in this quarter. We understand that whenever the deal got happened with the insurance company, we were expecting receivables to ease gradually.

Speaker #3: So if you want to throw some more light on what exactly is happening on that front and what should be the trajectory going forward in terms of the receivables management by Burjeel.

Speaker #3: That's why my first question. Thank you.

Speaker #4: Thank you, and that's a very valid question, which we look at on a daily basis. With Daman being one of the major insurance companies, they also had a technical issue at one stage, which was upgraded.

Shamsheer Vayalil: Thank you. A very valid question, which we look at it on a daily basis. With Daman being one of the major insurance companies, they also had a technical issue at one stage, which was upgraded. It was a system upgrade they did. That was one part of the delay. In general, our business with Daman has also grown. We have also tightened up the receivable discussions with Daman on a regular basis. There is always a contract that is bound between us, which is now more stringently looked at in terms of the delays. I'm sure this should improve with time. Of course, with what is going on, healthcare has become much more strategic and lot more focus has been given to the provider in terms of the payment delay.

Speaker #4: It was a system upgrade they did, and that was one part of the delay. But in general, our business with Daman has also grown.

Speaker #4: And we have also tightened up the receivable discussions with Daman on a regular basis. So there is always a contract that is bound between us, which is now more stringently looked at in terms of the delays.

Speaker #4: And I'm sure this should improve with time. And of course, with what is going on, healthcare has become much more strategic and a lot more focus has been given to the provider in terms of the payment delay.

Shamsheer Vayalil: We have had multiple discussions also with the regulator in terms of the receivables questions which has been raised. Now that the discussions have moved at a regulator level, we expect that this delay will be seen to be relieving with time as we move ahead.

Speaker #4: So we have had multiple discussions also with the regulator in terms of the receivables questions which has been raised. Because now that the discussions have moved at a regulator level, we expect that this delay will be seen to be relieving with time as we move ahead.

Ankur Khetawat: Thank you, Dr. Shamsheer. Maybe if I want to understand a little bit more, how should we think about the regulatory kind of thing, how long do you think they're going to take? Second thing is that, do you think that there might be any issues or higher than average claim rejection on these kind of receivables from the insurance company as well?

Speaker #3: Thank you, Dr. Shamshir. Maybe if I want to understand a little bit more how should we think about the regulatory kind of thing, how long you think they're going to take.

Speaker #3: And second thing is that do you think that there might be any issues or higher than average claim rejection on these kind of receivables from the insurance company as well?

Shamsheer Vayalil: You know the insurance companies delay tactics, right? It's always the case that how strong is your submission quality. That is why we have invested heavily into our, be it our CCR, CMN. We have a historic rejection rate with the insurance companies. You have seen their results, which was announced recently. You can see that the Daman profit is what they are mainly showcasing. Definitely we have a regulator which is very strong. I would say that within a quarter we would definitely be able to show improvements in that space. This is just cashflow management as well for the insurance companies, where they want to show profits, so they try to delay the first submissions. We are getting stronger with more AI applications into the clinical records, which goes beyond questioning.

Speaker #4: No, see, you know the insurance companies delay tactics, right? It's always the case that how strong is your submission quality? And that is why we have invested heavily into our beat our CCR, CM, and we have a historic rejection rate with the insurance companies.

Speaker #4: And you have seen their results which was announced recently. And you can see that the Daman profit is what they are mainly showcasing. So definitely we have a regulator which is very strong.

Speaker #4: And I would say that within a quarter we would definitely be able to show improvements in that space. And this is just a cash flow management as well for the insurance companies where they want to show profits so they try to delay the first submissions.

Speaker #4: But we are getting stronger with more AI applications into the clinical records which goes beyond questioning. So that is also some strategy we have taken in terms of the revenue rejections.

Shamsheer Vayalil: That is also some strategy we have taken in terms of the revenue rejections. I'm very confident that this would be brought into control and we will not leave any efforts to ensure that this is getting into check. This is one of my priority areas, and we'll not rest until this is sorted out. We have a contract.

Speaker #4: So I'm very confident that this would be bought into control. And we will not leave any efforts to ensure that this is getting into check.

Speaker #4: And this is one of my priority areas. And we'll ll not rest until this is sorted out. And we have a contract. So they cannot reject without valid reasons.

Ankur Khetawat: Okay. Thank you.

Shamsheer Vayalil: They cannot reject without valid reasons.

Ankur Khetawat: Okay. Sure. Maybe just last question on this front, if I may. Going forward, what type of receivable days should we think in terms of turnaround time from the insurance, just to take, let's say, 6 months to 2-year view on the receivables? Thank you.

Speaker #3: Oh, sure. Maybe just last question on this front if I may. Going forward, what type of receivable days should we think in terms of turnaround time from the insurance just to take, let's say, six months to two-year view on the receivables?

Speaker #3: Thank you.

Speaker #4: Optimal the optimal time is now 120 to 135 days. Yeah. So we and I think, see, with time, we are also putting a culture of not having so much of a delay because now with AI and all the submissions happening real-time, we are also moving into real-time data.

Shamsheer Vayalil: The optimal time is now 120 to 135 days.

Ankur Khetawat: Okay.

Shamsheer Vayalil: Yeah. I think, see, with time, we are also putting a culture of not having so much of a delay because now with AI and all the submissions happening real time, we are also moving into real-time data. We are also claiming that this timeline should not be just followed without reason. We are also putting up a case where the delay should be cut short drastically. I'm sure with my getting on the ground kind of an effort, they are listening to the entire health system because now with all the struggle in the region, people are not traveling, they want the health system to be more robust. This is also a very important step for the regulator to take to ensure that the healthcare providers are staying healthy and that typical practice of delay without reasons are going to be questioned.

Speaker #4: We are also claiming that this timeline should not be just followed without reason. So we are also putting up a case where the delay should be cut short drastically.

Speaker #4: And I'm sure with my getting on the ground kind of an effort, they are listening to the entire health system because now with all the struggle in the region, people are not traveling.

Speaker #4: So they want the health system to be more robust. So this is also a very important step for the regulator to take to ensure that the healthcare providers are staying healthy and that typical practice of delay without reasons are going to be questioned.

Shamsheer Vayalil: We are taking it head on, especially after last year Daman issue that we faced by increasing the price for our enhanced network, which they have to come online because our network is strong and our asks were not strong enough. Now that we are asking it clear and square, there's going to be a lot of changes that you will see as we go. We are not hesitating to bring the regulator. Normally, regulator coming into such discussions are not a normal practice. Be it the healthcare regulator or the central bank, we are going to any and every step possible, and we will not allow any unwanted practice of arm twisting by the insurance companies whoever they are. Thank you.

Speaker #4: And we are taking it head on, especially after our last year Daman issue that we faced by increasing the price for our enhanced network, which they have to come online because our network is strong and our asks were not strong enough.

Speaker #4: So now that we are asking it clear and square, there's going to be a lot of changes that you will see as we go.

Speaker #4: And we are not hesitating to bring the regulator. Normally, regulators coming into such discussions are not a normal practice. So be it the healthcare regulator or the central bank, we are going to any and every step possible and we will not allow any unwanted practice of arm twisting by the insurance companies whoever they are.

Speaker #4: Thank you.

Ankur Khetawat: Yeah. Thank you, Doctor. I will get in the queue. Thank you.

Speaker #3: Yeah. Thank you, Dr. I will get into Q. Thank you.

Speaker #2: Thank you. Thank you very much. Our next question comes from Mr. Kamal El Tawil from EFG Hermes. Text question. Two, actually. I'll read them out one by one.

Operator 2: Thank you very much. Our next question comes from Mr. Kamal El Tawil from EFG Hermes. A text question. Two, actually. I'll read them out one by one. Question number one: Please provide more detail on the relocation of Burjeel Hospital for Advanced Surgery in Dubai. Why is the relocation taking place? When was this decision made, and what is expected from a financial impact?

Operator: Thank you very much. Our next question comes from Mr. Kamal El Tawil from EFG Hermes. A text question. Two, actually. I'll read them out one by one. Question number one: Please provide more detail on the relocation of Burjeel Hospital for Advanced Surgery in Dubai. Why is the relocation taking place? When was this decision made, and what is expected from a financial impact?

Speaker #2: Question number one, please provide more detail on the relocation of Burjeel Hospital for advanced surgery in Dubai. Why is the relocation taking place? When was this decision made and what is expected from a financial impact?

Speaker #4: Thank you. And this is a very conscious decision because we had an access issue from Sheikh Zayed Road. Into that building and the building was quite getting old and out of shape with keeping in mind of what has been requiring for the market demands.

Shamsheer Vayalil: Thank you. This is a very conscious decision because we had an access issue from Sheikh Zayed Road into that building, and the building was quite getting old and out of shape with keeping in mind of what is being requiring for the market demands. That product did well when we opened, but then the problem of traffic access, the building quality, all of this were making us to think of the relocation. Especially we got a better location in Dubai South, which is the new side of Dubai where all the new population is concentrated. I think this is a very conscious decision and this will help us to overcome the quality of the product issue in Dubai. What we are launching in Dubai is going to be a very interesting product which is rightly placed for the market.

Speaker #4: Because that product did well when we opened, but then the problem of traffic access, the building quality, all of this were making us think of the relocation.

Speaker #4: And especially we got a better location in Dubai South, which is the new side of Dubai where all the new population is concentrated. So I think this is a very conscious decision.

Speaker #4: And this will help us to overcome the quality of the product issue in Dubai. And what we are launching in Dubai is going to be a very interesting product which is rightly placed for the market, which has got very serious approvals like a helipad facility on top of this hospital, which is like the first of its kind in a Dubai private sector hospital, which is having a helipad on top of the hospital.

Shamsheer Vayalil: Which has got very serious approvals, like a helipad facility on top of this hospital. Which is the first of its kind in a Dubai private sector hospital, which is having a helipad on top of the hospital. This is a very conscious decision, and I'm sure this will lift the Dubai, because we don't have much assets in Dubai. The asset that was on this particular property was having a tight bottleneck in terms of able to access to the hospital. Even for me, I get stuck in the traffic until we get that turn into the hospital. It was a conscious decision. I'm sure the new project will definitely set aside all the shortcomings in Dubai.

Speaker #4: So this is a very conscious decision and I'm sure this will lift the Dubai because we don't have much assets in Dubai. And the asset that was on this particular property was having a tight bottleneck in terms of able to access to the hospital.

Speaker #4: Even for me, I get stuck in the traffic until we get that turn into the hospital. So it was a conscious decision. And I'm sure the new project will definitely set aside all the shortcomings in Dubai.

Speaker #2: Thank you very much. We have a second question from EFG Hermes, relating to debt. The Sukuk carries a 7% coupon compared with the lower cost of your previous term loan facilities.

Operator 2: Thank you very much. We have a second question from EFG Hermes relating to debt. The Sukuk carries a 7% coupon compared with the lower cost of your previous term loan facilities. How should we think about the impact on finance cost going forward?

Operator: Thank you very much. We have a second question from EFG Hermes relating to debt. The Sukuk carries a 7% coupon compared with the lower cost of your previous term loan facilities. How should we think about the impact on finance cost going forward?

Speaker #2: How should we think about the impact on finance cost going forward?

Muhammed Shihabuddin: Obviously, apple-to-apple if we comparison, you can see the change, but it was a strategic decision. As a group, what we are planning to do when we considered about our growth plans. We realized that this is a more stable diversification of our financing solutions. That is why we adopt the Sukuk issuance. By doing this, our internal accruals, cash accruals, will be improved, which we can further utilize for our growth and meeting the stakeholders' expectations. It is a win-win in all aspects.

Speaker #3: Yeah. So obviously, like Abu Dhabi, if you compare it, you can see the change. But it was a strategic decision basically. As a group, what we are planning to do when we considered about our growth plans basically, we realized that this is a more stable diversification of our financing solutions.

Speaker #3: That's why we adopt basically the Sukuk issuance. By doing this basically, our internal accruals, cash accruals will be improved which we can further utilize for our growth and meeting the stakeholders' expectations basically.

Speaker #3: So it is a win-win in all aspects.

Speaker #2: Okay. Thank you very much. Our next question comes from Dev Chaturverdi from International Securities. Operating cash flow increased by 77% year on year despite higher accounts receivable and DSO.

Operator 2: Okay, thank you very much. Our next question comes from Dev Chaturvedi from International Securities. Operating cash flow increased by 77% year on year despite higher accounts receivable in DSO. Could you please explain the key drivers of this?

Operator: Okay, thank you very much. Our next question comes from Dev Chaturvedi from International Securities. Operating cash flow increased by 77% year on year despite higher accounts receivable in DSO. Could you please explain the key drivers of this?

Speaker #2: Could you please explain the key drivers of this?

Muhammed Shihabuddin: Operating cash flow is improved, obviously, one of the key points, which is the profitability improvement. You maybe noticed that this is a key element which has helped us to improve. Secondly, when we compare to Q2 of last year, there was a non-operating element of profit. That is where you can see that 77% growth. As we indicated, the group is moving towards enhancing its product, maturing of its ramp-up assets, and bringing efficiency into the system. This all is going to improve the cash flow conversion much better.

Speaker #3: Yeah. So operating cash flow is improved. Obviously, like one of the key point which is the profitability improvement. And you maybe noticed that basically this is a key element which is help us to improve.

Speaker #3: Secondly, like when we compare to the Q1 of last Q2 of last year basically, there was a non-operating element of profit was there. So that is where you can see that 77% growth.

Speaker #3: So as we indicated basically, the group is moving towards the enhancing is in the product maturing office ramp up assets and bringing an

Speaker #1: Efficiency into the into the system . This all is going to be improved . The cash flow conversion much better form

Operator 2: Okay, thank you very much. Thank you very much. Our next question comes from Mr. Sachin from Goldman Sachs. Please go ahead, sir, your line is open.

Operator: Okay, thank you very much. Thank you very much. Our next question comes from Mr. Sachin from Goldman Sachs. Please go ahead, sir, your line is open.

Speaker #2: Okay . Thank you very much Thank you very much . Our next question comes from Sue chin from Goldman Sachs . Please go ahead , sir .

Speaker #2: Your line is open .

Speaker #3: Hey . Hi . Thank you , Doctor , and thank you . So I have a question regarding , CapEx . So can you , , please share the numbers for second half of 2026 and 2027 ?

[Analyst] (BofA Securities): Hey, hi. Thank you, Dr. Shamsheer, and thank you, Shihabuddin. I have a question regarding CapEx. Can you please share the numbers for H2 2026 and 2027 intended CapEx number? That is my first question. Second would be regarding the receivable thing. We could see that there is a growing trend of increasing balances within the higher aging brackets. How should we read that trend?

Sachin Nayar: Hey, hi. Thank you, Dr. Shamsheer, and thank you, Shihabuddin. I have a question regarding CapEx. Can you please share the numbers for H2 2026 and 2027 intended CapEx number? That is my first question. Second would be regarding the receivable thing. We could see that there is a growing trend of increasing balances within the higher aging brackets. How should we read that trend?

Speaker #3: Intended CapEx number . That's my first question . And second would be regarding the receivable thing . So we could see that there is a growing trend of increasing balances within the higher aging brackets .

Speaker #3: So how , , should we read that , , trend

Speaker #1: So if you yeah , if you may notice our , , CapEx has a two element of it . One is that the growth CapEx .

Muhammed Shihabuddin: If you may notice, our CapEx has two elements of it. One is the growth CapEx, and second is maintenance CapEx. As we indicated in our presentations, we earmarked AED 1 billion for our growth CapEx, which is getting deployed. We are cautiously getting deployed. The overall midterm, our deployment will be AED 1 billion. It is not the year mark. The year one will be this much specifically. We are identifying a project, we are identifying the market, and we will be utilizing that earmarked CapEx more precisely. With regards to the maintenance CapEx, as we indicated, which is 2.5% of the revenue, which is enhancing our existing equipment, existing assets, introducing more AI capabilities and all, which is going to help us more with the operational elements.

Speaker #1: And second is maintenance CapEx . So as we indicated in our , in our presentations , basically we earmarked a billion dirham for our growth CapEx , which is getting deployed .

Speaker #1: Basically , we cautiously getting deployed . So the overall , a mid term , our deployment will be a billion . But like it is not the earmarked the year one will be this much .

Speaker #1: Specifically we are identifying a project . We are identifying the market and we will be utilizing that year CapEx in a in a more precisely , with regards to the maintenance CapEx , basically , like , you know , as we indicated , which is the 2.5% of the revenue , , which is enhancing our existing , , equipments , , existing assets in more AI capabilities and all , which is going to help us more into the operational elements .

Speaker #1: And for us .

Shamsheer Vayalil: For us, the main focus now is performance and cost. We are getting again into more of a tighter mode because we have now been able to deploy our AI EMR. We are getting to see a lot of live data. Our people and the team are focused on delivering the desired numbers that we are expecting out of them. Cost control because of whatever new technologies we are implementing, be it our revenue cycle model, we are able to remove some coders. There is a lot of elements that are taking shape, and I am sure we will be able to demonstrate some of them in the Q3 results as it comes.

Speaker #4: The main focus now is performance and cost . So we are getting , again , into more of a tighter mode because we have now been able to deploy our AI , EMR .

Speaker #4: We're getting to see a lot of live data and our people and the team are focused on delivering , , the desired , , numbers that we are expecting out of them and cost control because of whatever new technologies we are .

Speaker #4: , implementing , be it our revenue cycle model , we are able to remove some coders . So there's a lot of elements that are taking shape .

Speaker #4: And I'm sure we'll be able to demonstrate some of them in the Q3 results as they come.

Speaker #2: Okay . Thank you very much . , we'll give another few moments for any additional questions to come through So I think that's all we have time for .

Operator 2: Okay, thank you very much. We will give another few moments for any additional questions to come through. I think that is all we have time for. I will be passing the line back to the Burjeel management and IR team for any concluding remarks.

Operator: Okay, thank you very much. We will give another few moments for any additional questions to come through. I think that is all we have time for. I will be passing the line back to the Burjeel management and IR team for any concluding remarks.

Speaker #2: , I'll be passing the line back to the Brazil management and IR team for any concluding remarks .

Speaker #4: Thank you all for joining today's call for any follow up questions , please find the Investor Relations . Contact details at the end of this presentation and on Burjeel Holdings .

Shamsheer Vayalil: Thank you all for joining today's call. For any follow-up questions, please find the investor relations contact details at the end of this presentation and on Burjeel Holdings. Thank you very much, everyone.

Speaker #4: Thank you very much , everyone

Operator 2: Thank you very much. This concludes today's conference call. We'll now be closing all the lines. Thank you and goodbye.

Operator: Thank you very much. This concludes today's conference call. We'll now be closing all the lines. Thank you and goodbye.

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Q2 2026 Burjeel Holdings PLC Earnings Call

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