Orpea reports annual loss of $4.4 billion on asset depreciation

French nursing care provider Orpea, hit by multiple scandals including allegations of malpractice at its care homes, on Friday reported an annual net loss that was in line with the anticipated strong depreciation of its assets.

Orpea witnessed a tough 2022, following the publication of a book by independent journalist Victor Castanet, which sent shockwaves through France and much soul-searching over how the elderly are treated in nursing homes. It has rejected the allegations of widespread abuse.

The company, which has requested conciliation talks with creditors and warned of impairments, said its net profit turned to a loss of 4.03 billion euros ($4.44 billion) in the fiscal year 2022, versus a gain of 65 million euros a year earlier.

The group, which has facilities in more than 20 countries, said the net loss was mainly due to asset disposals.

At 31 December 2022 Orpea’s real estate portfolio was valued at 6.5 billion euros, versus 8.4 billion euros at the end of 2021, the group said.

“2022 was year of rupture, but it is also the year of re-foundation”, Chief Executive Officer Laurent Guillot said in a call with journalists.

The group also said its net debt is now projected at 4.5 billion euros at the end of 2025, versus 4.9 billion euros previously announced.

Orpea announced in February a financial restructuring giving bondholders the lion’s share of control after a deal reached with state financial institution Caisse des Depots & Consignations (CDC) and other investors, but a shareholder group that opposes the safeguard plan called for a general meeting.

“There is only one plan, there is no alternative plan. There is only one plan that provides the company with the necessary capital to rebuild and continue to operate,” CEO Guillot said.

($1 = 0.9084 euros)