Orpea profits plummet

After the scandal, the financial consequences: the group of private residences for the elderly Orpea, in crisis since the publication in January of a book-investigation, signed an agreement with its banks to ensure its financing in an uncertain context, after a collapse close to 60% of your annual net profit.

This agreement is part of “an amicable conciliation procedure”, to avoid difficulties, opened before the Nanterre commercial court, the group said in a press release published on Friday.

Credit of 1,730 million

“It responds to the current context of uncertainty that weighs on Orpea, as well as the closure of access to financial markets and the slowdown of the initially planned asset disposal program,” explains the group present in 23 countries and which manages more than 350 establishments of elderly dependent people in France.

It provides for the granting of a loan of 1,730 million euros, the execution of an asset disposal plan for more than 3,000 million euros at the end of 2025 and an optional loan for a maximum amount of 1,500 million euros.

“Learn lessons from this crisis”

“I am committed to ensuring that we learn all the lessons of this crisis to restore the trust that our stakeholders have always placed in us, wherever the group is established,” said Philippe Charrier, CEO of Orpea, quoted in the statement.

For this year, Orpea expects “to face exceptional charges related to the management of the crisis and its consequences.” It also expects its profitability to be affected by rising inflation that impacts “energy costs and wages in certain countries.”

Increase in billing

The group says it is “confident in the growth dynamics” of its turnover for 2022, but has not published any numerical forecasts. It will not pay a dividend for the 2021 financial year. In the first quarter, turnover increased by 9% to 1,120 million euros.

Last year, its net profit fell by 59.3% compared to 2020 to 65.2 million euros, due in particular to a provision of 83 million euros “for risks and charges related to the risks estimated for the years 2017 -2021 after the administrative investigations” to which the group was subject.

accusations of abuse

And in 2020 its net profit had already been reduced by almost a third because the health crisis reduced its activity and increased its operating expenses. However, in 2021, the group’s gross operating surplus (Ebitda) increased by 11% to 1.07 billion euros for a turnover of 4.3 billion euros, 9.6% more.

The group has been under fire from critics since the publication in late January of Victor Castanet’s investigative book “Les Fossoyeurs”. The independent journalist denounced in particular the mistreatment of neighbors and the embezzlement of public funds. A government-commissioned report on the process noted serious dysfunctions in early April. The State filed a complaint and demanded the restitution of public aid allegedly diverted from its purpose.

dysfunctions within the group.

Since the end of April, the group has been the subject of a judicial investigation, opened in Nanterre, on suspicion of institutional mistreatment or economic crimes. An interim report by independent firms Grant Thornton and Alvarez & Marsal, commissioned by Orpea, also pointed to dysfunctions within the group.

“Many corrective measures have already been taken,” said Philippe Charrier. Orpea, which announced last week the appointment of a new general director, intends to carry out “a great transformation plan, deployed mainly in France” aimed at improving in particular “the quality of support and the well-being of the resident”. as well as its human resources policy. First thing in the morning, on the Paris Stock Exchange, the Orpea title fell 4.70% to 32.23 euros in a rising market. It has lost more than 60% of its value since the beginning of the year, registering the worst drop of the SBF 120 index.