Mayo invests $50 million in UAE hospital project
Mayo Clinic has invested $50 million into its joint venture in the United Arab Emirates, according to a quarterly financial report released this week.
The investment, made in February, represents a 25 percent equity position in the Sheikh Shakhbout Medical City project, a 741-bed hospital in Abu Dhabi.
The Rochester-based medical center first announced last November it would be partnering with Abu Dhabi Health Services Company (SEHA) on the hospital, which began welcoming patients in late 2019.
In addition to the joint venture agreement, Mayo has entered into a “hospital expertise agreement, brand license agreement, and research contribution agreement” with SEHA.
As we previously reported, the hospital is banking on leveraging Mayo’s medical expertise, as well as its internationally-known brand, to become a regional hub for patients with serious or complex medical conditions.
The project represents Mayo’s second significant investment outside of the U.S. in as many years. The other, a 27,000-square-foot facility in London, opened in 2019. That clinic had originally started off as a joint venture with the University of Oxford; however, months back it was revealed that Mayo had taken over as the sole operator of the facility.
As for the Abu Dhabi hospital, Mayo reported this week that the joint venture has an initial commitment period of 20 years, with the option for an additional 10-year extension.
Financial report
News of Mayo’s investment in the U.AE. came as the Clinic announced a stronger-than-expected second quarter financial performance. A report filed with the Electronic Municipal Market Access shows Mayo bringing in revenues of $3.2 billion in the quarter from April 1 to June 30, with net operating income of $154 million and a 4.8 percent operating margin.
While those numbers are down from 2019 — when Mayo brought in $3.4 billion in Q2 with a operating income of $300 million — they do represent a quick recovery for the Clinic, which had to effectively shut down its practice to elective procedures for about six weeks of the quarter.
In a news release posted to the Mayo News Network, Mayo leadership credited the turnaround to “exceptional staff work and collaboration, strategic expense reductions and emergency relief funding.”
With temporary staff reductions, Mayo reported expense reductions totaling $300 million in May and June. Mayo also secured $173 million in emergency relief funds through the CARES Act.
Sean Baker is a Rochester journalist and the founder of Med City Beat.
Cover photo courtesy Mayo Clinic
