SMC: Rising clinic utilization to support profit margins

Bassam Shaheen, CEO of Specialized Medical Co. (SMC), said inpatient bed occupancy rates rose to nearly 78% in Q3 2025, from 75% a year earlier, after converting 90 beds to acute-care use. This shift reflects stronger demand and more efficient deployment of operating resources.

In an interview with Argaam, Shaheen said that outpatient clinic utilization reached roughly 54% in Q3 2025 following the addition of new clinics under the company’s expansion plan. He noted that none of the clinics is yet operating at full capacity, which can be gradually increased by extending operating hours and adding physicians in line with demand.

Clinic operations are significantly ramping up at a clear pace, which is expected to continue lifting profit margins in the coming months.

He added that demand for the company’s services was “very strong” in Q3 despite the usual summer slowdown, delivering notable profitability growth during the quarter. Momentum is expected to continue, supported by strategic expansion in Riyadh’s key growth areas and maintaining comprehensive, high-quality service offerings.

The company’s strategic shift from long-term care to acute care has directly strengthened margins, as acute-care services generate higher revenue per bed than long-term care.

Higher utilization at new outpatient clinics, lower structural and recurring costs, and reduced expected credit-loss expenses all helped lift EBITDA margin to 27.3% from 24.7% and expand net profit margin from 15.1% to 17.3% between Q3 2024 and Q3 2025.

According to Argaam data, SMC’s earnings fell to SAR 132.2 million in the first nine months of 2025, from SAR 159.1 million in the same period of 2024. The third-quarter profit reached SAR 66.2 million.