Riyadh – Mubasher: The board of Al Hammadi Company for Development and Investment approved to establish a new hospital to replace the current Al Hammadi Hospital Olaya at a total cost of SAR 450 million.

The project works will commence in the first quarter (Q1) of 2022, with expectations to complete building the hospital by Q1-26, according to a bourse disclosure on Thursday.

Duration of the pilot production of the project will be two months. The new medical facility will comprise 300 beds and 120 clinics.

Al Hammadi noted that it will fund 80% of the project by securing loans, while the remaining 20% will be from internal cash flow.

The development will likely boost the company’s revenues by 30%, which will reflect on the income statements of Q1-26.

Operations at the current Al Hammadi Olaya Hospital will be suspended this October, which will lead to registering asset disposal losses of nearly SAR 57 million, in addition to about 10% decrease in Q4-21 revenues.

However, there isn’t a significant negative impact expected to reflect on the company's profitability in the coming years due to the closure process.