I'll start with the key developments. Then Nino, our Chief Economist, will talk about the macro update. Then Giorgi, our CFO, will talk about the portfolio company results and valuations. He'll talk about, as well, liquidity and dividend income outlook. I'll do the wrap-up, as always, and then we will do the Q&A session, and hopefully, it will be engaging. Let me outline four key points for the quarter. We were up in every per share. Our key metrics was up more than 11 percentage points, basically, in Q1. Good progress. Most importantly, our private portfolio companies were performed extremely well. Our large portfolio company performed extremely well. The revenue in the quarter was up more than 20%, and the EBITDA was up more than 45%.
The high growth of our portfolio companies, private portfolio companies, continues, and we see strong results in April coming in and May as well. We are aiming for the strong Q2 as well. NCC ratio was a little bit down due to the announcement of our second $25 million buyback program. We continue to buy back our stock aggressively, and we like the discount. We are buying it, and it is in line with our capital allocation strategy. In total, we bought back 21 million shares from the beginning of 2025. It is a big progress we have this year. The good point here is that we have bought back more than 27% of our shares issued in issuance. We continue our buyback programs as we did before, and we continue now.
and, in total, we bought back 13.2 million shares, with average cost of $164 million. We think we've been buying it at a good price, and we think that we are buying at a good price now. Let me move on to the NAV per share development in Q1. But before that, I wanna talk about the format of how we are going to present you, going forward, our financials. We are making a little change. No, it's not a big, big change. We are making a little change in order for you to focus on the key, large companies. These key large companies will be retail pharmacy, insurance, and healthcare services. Then, together with the Alliance Finance Group and water utility, this represents around 85% of our NAV.
If you are covering these three companies, you are basically, you know, what's happening in GCAP. Renewable energy, education, auto services, wine, real estate, we will be presenting under the emerging and other portfolio companies, which is only 14% of the total portfolio. I think that would be helpful as well going forward when NAV discount hopefully declines, and we will start dividends program. Large portfolio companies will be dividend providers, basically, going forward. It's kind of a gearing for the future or gearing for the lower NAV discount. Now, looking at the composition of gross in the quarter, we started the quarter with GEL 95.95 NAV per share. We had listed and observable portfolio contributed nearly 7% positively. Operating performance of our private portfolio companies contributed positively 4.3%. However, we decreased the multiples on our, in our valuations.
Even though we grew 11.2% in the quarter, on the back of that, we are actually getting even more conservative when we are doing the valuation of our private portfolio companies by decreasing the multiples. Basically, we decreased the multiples by 1.6% contribution into the NAV per share. Buybacks contributed 2.7% positively. Operating expense minus 0.3%, and liquidity effects and other was minus 0.7%. In total, we did 11.2% gross in NAV in three months. I must add that the Alliance Finance Group shares continue to rally after the end of Q1. If you count that in, this year as of 6th of May, our NAV per share is up nearly 21%, GEL 215.97, or in pounds, GBP 31.7. Now looking back, the CAGR of our NAV gross was more than 15%.
It's not the target. It's not the number we are very proud of, but I think we've been delivering okay so far after our burst in 2019 to 2018. I think for the new investment company, it's not bad, but we are aiming for better, to improve this metric. If you look at the last five-year metric, basically, it looks even better. In GEL, it looks more than, nearly 30%. In dollar, 33%, and in pounds, 32%. Five-year metrics, past five years, as we learned more how to manage the company, past five years, the metric is somewhere where we want to be, and around 30%. Share buyback and consolidation program. Once again, let me outline, probably we are very proud of our buybacks and the pace we are retiring the shares.
We started the life in 2018 with 39 million, little more than $39 million shares. We went to $47.9 million as a result of acquisition of the GAG, and then we are down to $37.4 million shares. In total, $164 million we have spent in buybacks. As I mentioned, it is nearly 28% of issued share capital, which we bought back. Let me update you on the GEL 300 million buyback program, which we have announced in May 2024. We said at the end of 2026, we will buy back GEL 300 million worth of shares. We will buy back worth of shares. As you see on this chart, we are almost there. We have GEL 35 million left from the current buyback program, and we are deploying it. We need another GEL 50 million to meet this goal.
After meeting the goal, we will announce new target. Let me talk about the aggregate portfolio results. What we have at this, this is one of the key metrics for us. We look at the revenue in Q1, went up 21.2% to GEL 431 million. That is with regards to the large portfolio companies. Last 12 months, it is up 16.2% to GEL 1.6 billion. Solid performance of our private portfolio companies. We continue to observe a good performance after the quarter as well. In terms of the EBITDA, in quarter, we, as I said, nearly 46%. EBITDA was up, and last 12 months, EBITDA is up 34%. Again, solid performance continues there. Regarding the cash flow and cash balances, you see that cash generation is strong. In the quarter, we are up to more than 25% in Q1.
In the last 12 months, we are up nearly 90% in cash flow generations. Sorry, in aggregate net operating cash flow, yeah, cash flow generations. In terms of the aggregate cash balances, it's also up year over year, nearly 58%, and in the quarter, we are up nearly 17%. Strong cash flow generation. Again, that's another key metrics what we are looking for our private portfolio companies. That's an important KPI for our management team. Let me update you on the leveraging. As I mentioned, our NCC, one of our key metrics as well, is up 0.7 percentage point to 13.5%. That's as a result of the buyback we announced. As you know, our NCC considers all the committed capital. Basically, we upfront recognize the $25 million buyback program.
It hasn't been spent yet, but it has been recognized by the end of the quarter. On development of NCC, we have another great track record. I guess that's where we were focusing to decrease the NCC ratio quite aggressively. We did it over the time. End of 2019 till March 2025, we decreased from 42.5% to 13.5%. In terms of NAV discount development over time, you see that when we started our, when we started GCAP, it was quite low. I mean, compared to now, it was not low, but around 20%. We had the NAV discount during COVID times. It has widened, and it reached nearly 66% in September 2022, sorry. Now it's down to 47%. Okay. It's still very high, and we are happy buyers of our stock.
We have improved a little from top, from high 67, but we are still far away from our low point of the 20% NAV per share discount. If we decompose our NAV, NAV per share, it is basically, listed and observable portfolio contributes GBP 16.5 out of GBP 31.7. Private portfolio contributes GBP 17.2, and net debt is negative GBP 2.1. If you look at the, on the right side, chart, you see our share price as of May 6th, and you see that share price of GBP 16.8 is almost the same as listed and observable NAV per share, which is GBP 16.5. All the private portfolio of GBP 15.2 comes for free now when we are buying back our shares. That is kind of where we look at basically the way we look at our buyback appetite.
In terms of the macro, let me move to Nino, and then Giorgi will present. Thank you, Nino. And
thank you, Irakli. Hello everyone. As usual, I will do a very quick macroeconomic overview of Georgia. Let me start with recent world economic outlook. The global growth was revised downward from 3.3% to 2.8% as uncertainties persist. There is a significant tariff uncertainties, and the shifting trade pattern. According to the IMF's estimations, the effective tariff is highest in the century, which of course affects the global growth. Growth is expected to slow on a global level and on a regional level also in our region, in Central and Caucasus and Central Asian regions. The growth came very strong, more than expected, mainly because of the longer and stronger positive spillovers from Russia's invasion of Ukraine.
The same was true in Georgia. We had several years of very high growth, and the growth came out higher than expected in the first quarter also. It was very strong at 9.3% in real terms according to the preliminary estimates. If you look at the sectors, it is very important to mention that the sectors which are growing are quite high value added sectors like the IT sector, education, which is important for our economy, and it is one of the reasons why we do not have high inflation pressure despite the high growth rates. 2025 will be a very interesting year for us because the GDP in nominal terms is expected to exceed GEL 100 billion, which is a nice figure, doubling over five years.
According to the IMF's projection, Georgia's growth is expected again, is Georgia is expected to be one of the highest, fastest growing economy in our region. Also, the growth is expected to moderate toward potential level. On the next slide, we have charts where we are showing some, the reasons for this high growth or the results for this high growth. We have very active banking sector, which contributes significantly to our domestic economy and domestic demand. Banking loans increased by almost 70% excluding exchange rate impact. We should mention that the business loan contribution was quite, so it quite high, and it is nice to see that. Fiscal policy was supportive last year on the back of, it was like the election year. This year also we have local elections. Infrastructural projects will be active and fiscal policy will be supportive.
One of the reasons the Georgian economy remained resilient against the domestic and external shocks was this very strong labor force and labor sector. We had the lowest unemployment in our reporting history and also the highest number of employed persons. In terms of the external factors like fixed inflows, which we are looking at, which includes remittances, tourism revenues, and exports, the total number, the aggregate number, continued to increase. We had several quarters of decline on the back of declining remittances as remittances from Russia returned to the prior levels. Now we see that this impact faded out and tourism revenues also increased, not very high. It was like 2.3%. We see some shifts in the countries in our tourism revenues.
In terms of exports, the recent years of high growth number in our export was mostly driven by exported cars. Now we see some signs of, positive signs of domestic export component as so like the copper and ferroalloy demand on international level was quite muted. Now we see some, positive contribution from the domestic export also. On the next slide, we are showing some monetary variables like, as we were expecting, the inflation exceeded the target after two years of below target inflation. In March and April, inflation came at, a little above the 3%. In April, it was 3.4%. It was, and it was mostly the food prices which affected the inflation and headline number. If you look at the core inflation, which excludes the volatile component like the food and energy prices, core inflation was, stable at 2.3%.
National Bank of Georgia today kept the refinancing rate at 8%. As it was widely expected, as inflation pressures still persist from the domestic and external components, like we have very strong domestic demand at home, and we have some tariffs and some shifts in trade patterns and supply side pressure from the international market, which of course needs some monitoring. National Bank of Georgia was quite cautious on that. As you know, we had significant interventions before the elections from the National Bank of Georgia. Now we see NBG re-entering the FX market. NBG bought more than $100 million in March, in line with its commitment to increase the reserves, which is GEL 4.3 billion as of March, and exchange rate, which was some kind of, there was significant volatility around the exchange rate during the elections, during some social protests.
So, but despite all of these factors, now we see exchange rate to stabilize, against the US dollar at $2.75 on the back of stronger fixed inflows, weak dollar, as well as fading, exchange rate depreciation expectations. And, on the last slide, I guess it is, for me at least, is, most important one is, that this several years of high growth, led significant shifts in our economy and solid, rapid, and broad-based, deliveraging, in our, economy. So if you look at the, government debt, it is lowest since 2014. If you look at the gross external debt, which includes external debt of private companies, also is lowest, at least since 2010. We are looking to 2010 because it was some year when NBG did some revisions of the statistics. So, and the same is true, for national international investment position.
It is at the strongest phase at least since 2010. Even the loan growth was quite high during the several years. Credit to GDP gap, which is reported by the National Bank of Georgia, is still negative, which means that the credit cycle is healthy and sustainable. All of this strong growth during the recent years led to deleveraging and improving in our external balance sheet, which is kind of unlocking further investment potential and growth. Just several messages for you as a wrap-up slide from macro. We have high growth again, high for the real GDP growth came at 9.3%, and we expect nominal GDP to exceed GEL 100 billion this year. Inflation exceeded the target. We expect inflation to be above the target for some time and to return to the target later on.
NBG re-entered the FX market, bought more than GEL 100 million in March and is committed to increase reserves and to be more active in the intervention. There is a favorable macro condition for that. Dollar is weak and we have stronger fixed inflow. There is a room for intervention, and we have significant deleveraging, boosting resilience and unlocking further investment potential and growth. This was a very quick macro review from my side. I will answer your questions if you have any during our Q&A session. Now I will hand over to Giorgi to continue presentation. Thank you.
Thank you, Nino. Hello everyone. Over the next few slides, I will be taking you through our evaluations and the results of our large portfolio companies, together with the liquidity and the dividend income outlook.
Starting with the portfolio evaluations, the first quarter is when we do the evaluation for our private portfolio companies in-house based on the similar methodology that's being used by the third-party valuation company that values our portfolio every six months at year-end and at the end of the first half. When we summarize the valuations, about 41% of the total portfolio value was in Loan Finance Group, which was marked at the share price as of the end of March, and it was around GBP 55. As you can see, since then the shares have rallied and it's now at around GBP 63, which added around GEL 300 million to our portfolio value. Water utility continued to be valued at the option valuation that we apply for this 20% stake, and it has remained unchanged from the previous quarter.
For the private portfolio, across the board, as the EBITDAs increase for these businesses, it resulted in, you know, lower multiples while the valuations also increased. As we will go through the rest of the slides, you will see that the multiples have largely come down, especially in the retail pharmacy and in the healthcare services, where the EBITDAs that we looked at previously were lower than the run rate EBITDAs that we estimate for these businesses. As we shifted our portfolio that was discussed earlier on the slides, the emerging and the other businesses account for only 14% of the overall portfolio, where the two, our largest emerging businesses, which is education and renewable energy, accounted for the most part, roughly, you know, close to 10% of this entire emerging and other portfolio businesses.
If we go into the contributors, into the P&L and the portfolio valuation changes on the next slide, you will see on the left that the largest P&L contributors were in fact retail pharmacy, healthcare services, and insurance. And combined, they provided around GEL 130 million, GEL 35 million, within our income statement. That was, you know, offset, by GEL 40 million due to changes in various businesses across emerging and other portfolio businesses of roughly GEL 40 million. Our portfolio value at the end of the first quarter was in excess of GEL 4 billion, GEL 4.1 billion. That, as you see, that was because of the Loan Finance Group and the large portfolio companies, increasing, in value and the small decrease that we had in the emerging and other portfolio companies.
If we combine this with the subsequent moments in the Loan Finance Group, since the end of March, the portfolio value is roughly GEL 4.4 billion, as of now. Now let's go through each of our large portfolio companies, in more detail, about their performance and how their performance has impacted the valuations. Starting with our largest private portfolio business, which is retail pharmacy here, you know, we had another set of fantastic results where the management continued to focus on the gross profit margins in this business, and the gross profit margins continued to increase. The blended one across wholesale and the retail businesses was in excess of 32%. When we look at the retail, retail margin was in excess of 34% and, you know, trending towards the 35% that, you know, we have previously mentioned.
The growth here was supported, you know, by both growth in the retail business as well as in the wholesale. In fact, the growth in the wholesale was double digits in this quarter. Retail-wise, we have seen a very positive dynamics in the same store revenue growth, which, as you can see on this slide, it now approaches 3% and represents about 220 points increase from the last year when it was, you know, largely flattish. We have also seen the average bill size grow close to 10% in this business, which was also supportive of the revenue. Notwithstanding the increases in the operating expenses, that was largely due to the increase in the salaries and the marketing expenses because of the business growth.
We saw, you know, 55.6% growth in the EBITDA and the EBITDA for this business, which is GEL 24 million, which is record high for the first quarter, for the retail pharmacy business. We do expect this positive momentum to continue based on what we're seeing so far in the second quarter. Our expectation for the next quarter, for the second quarter, is that the EBITDA growth should continue to be double digit. In terms of now the impact on the valuations, you can see that we had about GEL 67 million valuation gains from this business, where about GEL 46 million was because of the increase in the EBITDA, this 56% growth that we saw before. About GEL 21 million was because of the operating cash generation in this business as they continue to generate cash, which reduced the net debt.
That was also positive for the net debt to EBITDA for this business. You can see at the bottom on the right that the adjusted net debt to EBITDA for retail pharmacy business has now reached our targeted level of 1.5. It was 2.3 a year ago and, you know, decreased by 0.4 times just in this quarter, only in the first quarter. Our target is 1.5, but we want this business to be below. You will see a continued, you know, decrease in this net debt to EBITDA in the coming quarters as this business generates more cash. Just lastly, as we said, the EBITDA multiples have come down for valuation from 9.7 times, which was a year ago, to 8.2 within the quarter. The decrease was, you know, 0.2 times.
Now turning into the insurance business, where we combine both P&C and the medical insurance businesses, they both had an outstanding quarter in terms of the revenue growth. Here, on the revenue-wise, you see that, you know, last year we did not consolidate RD and this quarter we are consolidating RD. So it impacts the medical insurance numbers, the growth that you see. However, even when we look at like for like, so if we look at EMADL in both quarters, the growth in revenues there was 24% plus. That combined with 21% growth in P&C insurance was a very strong result in this business. We are seeing the growth of the average insurance premiums in both businesses pretty strong, but also overall growth, the organic growth in the business, especially on the P&C side.
We continue to see the growth in the motor insurance and the credit life insurance. We had, you know, a few, one-off, property insurance claims that we recorded in the first quarter that resulted in the net income growing at a lower rate than the revenue. You know, this will be offset in the future quarters. Still, the growth was 12.5% in the P&C insurance. On the medical insurance, the growth GEL 1 9 million. What we really like in this business is that the gross premium growth is, you know, double digits across both of them. This provides the pipeline for the future revenue growth, which will translate into the growth in the bottom line, as well. This strong growth also had a positive impact on the valuations.
Here the growth was, you know, about GEL 20 million, which had a very small impact also on the multiples. It was a, you know, rounding difference, 0.1 times change, but there was no change in terms of the leverage here. The business continues to deliver and we continue to expect very strong growth here, should be double digit as well in terms of the net income when we look at, you know, second quarter based on how we are proceeding so far. Now, the last business in the large portfolio companies is the healthcare services business, which now combines the hospitals business. Within hospitals, you know, we have large and specialty hospitals and regional hospitals and clinics, but also the clinics and the diagnostics business that we had separately reported before. Hospitals business continues its recovery trajectory.
I would highlight that the growth in the outpatient services, which is, you know, higher margins than the inpatient services that we provide within our hospitals, has had a very positive impact on the dynamics in the revenue growth. On a combined basis, we grew by 19% in this business, but on an EBITDA level, the growth was even higher. It was 47%, and the strong momentum was across all businesses, hospitals, clinics, and diagnostics. We do expect this growth also to continue in the coming quarters. Again, we also expect here that the growth in the EBITDA next quarter should be double digits. This growth is supported across the boards.
You can see here from the operating highlights that, you know, we had growth in the occupancy rates and within our hospitals, in the admission rates within our hospitals, as well as the growth in the, you know, the number of patients we had within our clinics or within our diagnostics. So the numbers are trending in the right direction, and we expect that this momentum will continue for the quarters to come. In terms of the valuation, obviously the 47% growth in EBITDA had a positive impact on the valuation. So the EBITDA growth resulted in GEL 66 million valuation gains that were offset by the negative changes within the net debt of GEL 16 million.
This is largely a timing difference, and we do expect in the coming quarters that it will reverse and we will start collecting more cash in the coming quarters so that this decrease in net debt will be offset. Overall, we had the GEL 50 million valuation gains from the value changes in this business. We saw the valuation multiple come down again to 10.3 times, and a year ago it was close to 13. Net debt to EBITDA also is trending towards the right direction. 5.2 times a year ago is now 4.1. It is going towards our targeted ratio of 2.5 times. We think by the end of this year we will be inside four times, around 3.7 times. You know, as we go every quarter, we will update you on this. Now, this summarizes the portfolio companies.
Just briefly jumping into where we stand in terms of the liquidity, you can see on the next slide that liquidity-wise, you know, we spent money on the buybacks primarily in the first quarter and also on the coupon we pay every six months, close to, you know, GEL 6.5 million to service our GEL 150 million bonds. We still continue to have a strong balance sheet, GEL 58 million worth of cash. This does not include, you know, some of the buybacks, sorry, dividends, confirmed dividends that we expect to receive, for example, from Bank of Georgia or Loan Finance Group. We should be receiving roughly about GEL 18 million at the end of the second quarter or beginning of the third quarter. On the next slide, you see the dividend income outlook, which remains unchanged.
We still expect to receive GEL 180 million plus dividends in 2025. Notwithstanding that, you know, last year we also had dividends from beer and distribution business, which was GEL 10 million plus, and that's, you know, no longer part of our portfolio, but that has been offset by the growth in the other businesses. In the first quarter, we received GEL 8 million dividends. We do expect, you know, dividends to pick up in the second and the, and the third quarter as we receive dividends from Loan Finance Group and other portfolio companies.
But one metric that I would highlight here is, you know, even though this expectation is flat over last year, in terms of the total dividend inflows on a per share basis, we're growing dividend income by 11.6%, as you can see, on this slide, just given the strong momentum in our buybacks, as we have bought back and canceled about 2.1 million shares, in 2025. With that, I will hand it over back to Irakli, for the wrap-up session.
Thank you, Giorgi. Just to wrap up, strong NAV growth in Q1, outstanding performance by our private portfolio companies, strong EBITDA growth, strong revenue growth, leverage ratio of NCC is in check, below our targets of 15%, and buyback, strong buyback, continues with 2.1 million shares bought in Q1 and it continues. We have a strong economic growth.
We have a strong proposal of our portfolio companies, and we have strong progress on the deleveraging. On this note, I will move to the Q& A session. Shako, please let me know if we have some.
Thanks, Irakli. Yes, we have a number of questions in the Q and A chat. The first one is from Niall. Niall, great set of results again. Can I ask how will the strong real wage growth impact your businesses?
I mean, we have salary inflation, obviously, but our revenue growth is much greater than the salary growth that we have. Therefore, even though the revenue grew like 21%, the EBITDA grew 45%. That gives you a kind of positive operating leverage for our portfolio companies.
I must say that we have made a lot of changes in management in our portfolio companies, and that has a very positive impact on the performance. I think that this performance is not only the strong macro, but also the management changes which we have delivered and the management which is delivering the outstanding results on. Yes, absolutely. The real wage growth is high, but we are managing with our good management teams to produce the positive operating leverage.
Thank you, Irakli. While we're waiting for questions, maybe a quick reminder. If you have questions, feel free to press the raise hand button or you can type them in the Q & A chat. We would prefer live questions, of course, but it's up to your preferences as well. Okay. We have a question from John Young. John, please, you can unmute yourself.
John, can you please unmute yourself?
Oh, maybe it was a technical thing. We have a question from John. John, please go ahead.
Hi. Thank you very much for your presentation and congrats on the results. I have a question on these capital allocations. I mean, there is a strong execution on the buyback side. What should we expect going forward once this program is finished? Basically, two questions on my side. What is the minimum cash level that you want to hold at the hold level? And then second question is regarding this planned investments in renewable and education, when do you plan to spend those two investments, when you want to execute them?
Sorry, John, I did not hear the second one, the on hold call level. What did you say?
Yeah, sorry.
The question is at the hold call level, so currently you have, I guess, $55 million. There is, I guess, another $10 million on the buyback, so you will end up with $40 million before dividend income. Do you have any kind of a minimum cash requirement to keep on the hold call level? That was the question. Oh, sorry. Yeah. Okay. Yeah. The follow-up of this planned investments, I guess, in total $38 million in renewables and education. When do you plan to spend those investments?
Yeah. Yeah. Basically, on the cash requirement, I mean, our capital allocation strategy is very simple. Basically, if we can buy cheaper than GCAP, we will buy, we'll deploy the capital. If we cannot buy cheaper than Georgia Capital shares, we buy Georgia Capital shares.
As long as the NAV discount is high, we continue to do that. In case the NAV discount will come down and we generate free cash, we will either distribute or we buy, which should be cheaper than GCAP. It is a basically very simple model. It is nothing complicated. It is a GCAP price, how cheap GCAP is, or how expensive GCAP is. With that one, we decide we buy GCAP or we invest. Cash, what we have on the GCAP side, will be formed on that. At the same time, we have a leverage of $150 million and we have our SEC target. On the leverage in a medium run to long run, we want to bring it down to zero. Over time, we will be juggling through the buybacks, investments if we can.
I mean, we only bought recently this RD Insurance Group, which was cheaper than buying the GCAP. That was kind of when we integrated and we have great results there. Basically, if you look at it right now, our hands are tied with 47% NAV discount. Our hands are tied to invest. We will have some money deleveraging going in, in short term, in the medium to long term, we want zero. We do not want to leverage on GCAP. As the NAV discount is high, our appetite to deliver is lower. The more we decrease the NAV discount, the more our appetite will increase to deliver and the more appetite will go for investment. As simple as that.
In terms of the cash level, what we want to hold, we do not have such target, but I think that minimum what we need to hold is around $20 million at hold call level. Basically, the remaining, it is up for the grabs, up for the deployment. We deploy over the time. It is not gonna, we are not gonna sit there with a lot of cash all the time. We either deliver, we buy back, or we invest. Basically, that is the thing. In terms of the investment in the, of $38 million CapEx investment, what we have coming up, I mean, it is been deploying as we speak, or some of them, we are, some of these projects are on hold, some of them are deployed.
Basically, I think that within the next six to nine months, we will have greater clarity on the investment outlook. Especially on renewable energy, our projects have been delayed for quite some time. We have it as part of the NCC calculation, and I think this year we need to resolve how we are going to go on these projects. In terms of the education, we are deploying, we are investing, we are, and we are going to continue investing there. Yeah. Very clear.
Thank you, Irakli. Just maybe a follow-up. On these planned investments, how should we read this? Like $38 million, is it, these investments will be funded by internal cash flow of these companies, or should we treat them as capital injection from the hold call side to the subsidiary?
Oh, that is from hold call side injection.
Okay. Okay.
It's not the, we are whatever we show investment, we show the hold call investment basically.
Okay. Understood. Very clear. Thank you very much.
Thanks, John.
Thanks, John. The next question is from Brett Wibitzki. Can you go into more detail about what changes the new management has made in the healthcare businesses?
I think one very big structural change, what the new management has made was that we had a big back office and we are managing all these hospital chains centrally. There was a big decentralization happened. Basically, the hold call was decreased by 80% of people. Then we delegated more to the, on the ground, and we have gave them the KPIs and more decision making on the ground. These hospitals started to perform better.
That is kind of a, for instance, one big change, what has, there is a lot of change. I do not want to list them, but basically one fundamental philosophical change of how we manage the hospital business was the decentralization, which played a big role, I think, in the success. We have a 50% plus EBITDA growth quarter -after quarter. The Q2 kind of also looks very, very strong for healthcare business.
Thanks, Irakli. The next one is from Milker Samuelson. Any updates on the exercise of the water utility business? The follow-up question is also, have you contemplated the tender offer in addition to buybacks given the large discount?
On water utility, basically the put just recently, we can only excite the put after the annual results are produced.
Just recently, a couple of days ago, it was signed off, the annual results. We are looking at it and we will make a decision soon on the exercise. Regarding the tender offer, the tender offer for buybacks, we are considering all the avenues, tender offer, buyback, et cetera. One thing which I like a little bit that we have a continuous program is always in place. If we go bank one, big one, and then we try, and then we do not, you know, we do not provide liquidity to the market, it may not be a best option, but we are flexible. We may, it depends what the share price is, what discount is, what is our appetite in terms of the investment, the leveraging. It all depends on this one.
Basically, I think that so far, for with the seven year plus, kind of track record, what we have in capital allocation, you could have a feeling how we are allocating the capital basically.
Up next we have John Young. Sorry for the technical issue. Congrats on the great quarter. Question on the pharmacy business. The business had a great quarter. In the annual report, it states that the five year financial target for the pharmacy business is to grow at double-digit . Where do you see the growth come from? More stores or same store sales? Both seem to stay flattish in 2024 and 2023. How many more stores do you see the pharmacy business can add?
I think that at 2023 and 2024, we had a regulation changes a lot. So we had a price regulation for RX drugs.
That's why we were expecting the decline in revenue because there was a big, big regulation that came in, which is now over. That's 2023 and 2024 as a result of this price regulation. Now this price is regulated. The growth of the business is not gonna come only from the new stores, but the same store sales. Most importantly, our model of the pharmacy model, it's basically a health and beauty. We are doing more cross-sell of our pharmacy products, beauty products, when we sell our medicine. Basically, that cross-selling is pretty, pretty good. We are stepping up, and the percentage of the revenue of the beauty products is increasing. Our bet is that we grow on the beauty products quite strong.
That is kind of our growth momentum. Another one is, we started to do a distribution in the region. We are creating mainly the beauty brands, which we are selling in the region in different countries, our neighboring countries, Azerbaijan, Armenia. We are looking at Central Asian countries. Plus, we are growing the pharmacy chain in Armenia, and we are very happy to continue that. The most important part, what we have a very big advantage in the region is that we know how to cross-sell beauty products, and how to create the format, which is basically, I mean, I would call it boot style format, which is non-existent in our region. We know how to operate them. That is our big advantage.
Second advantage is that basically we have a very strong relationship with the strong brands in the West, and that brands are not present in the Central Asian countries, for instance. We are in a way a bridge for them. In a way, the products need to pass to Georgia. Basically, we have a strong domestic strategy in terms of cross-selling the beauty products, but we have a regional distribution strategy. Right now we are not present in those countries. We are only present in Armenia and we are growing in Armenia. Basically, distribution in our region is a distribution business of our, mainly the beauty products, is basically moving strong. I mean, for instance, we have a Body Shop franchise for the whole region.
We have this kind of, you know, the relationship with the Western strong brands, which we are, in a way we are own, we are their key partners in the region. That is where we think that growth will come. 2023 and 2024 was mainly a focus of the, focus of this, sorry, the price regulation affected. Now we are growing, continue to grow our drugs and beauty products business.
Thank you. The next couple of two questions actually relate to the water utility. I think you already addressed those, Irakli. The next one is about the feedback of the meeting with Georgian government officials, the board meeting.
Yeah, I mean, board met with the Prime Minister. It is a relationship with the board wanted to have a meeting with the Prime Minister.
Thanks to the Prime Minister for his time to meet our board. It was a very productive meeting. I think the Prime Minister once again said that the business environment, good business environment, is top priority for the current government. The strong economic growth is a big priority for the government. Foreign direct investment is important and board and Prime Minister were pleased. I think, I hope that he was also pleased with the meeting and board was very pleased meeting the Prime Minister.
Thank you. I guess we do not have any open questions as of now. Any more questions? Okay. The next one is from John Young. Again, on the insurance side, the worldwide industry trend is to collect more data, making better use of data with AI.
Can you comment on how the insurance operations are developing on that front?
I'm not gonna claim that we are the best in AI, but we are basically, our team is looking at it and we have, for instance, one of the products which our team introduced is you can only insure when you are driving. So basically, once you do not drive, it is not insured. When you drive, it is switch -on and switch -off. I think there are a lot of products, and I think that the more we learn about it, more data analysis we will be able to do. I think more products like that we would be able to introduce. I think that you are right. Absolutely, the insurance is one of the front of this innovation.
We have a very, very good management team, which is delivering not only good result, but also very good progress on the technology side. I hope that they continue to do that.
Thanks, Irakli. No open questions for now.
Let's wait a little bit if there will be some. I guess no more questions. Thanks everybody for attending our earnings call. Thanks for engaging questions. I hope you got all the answers. If not, and you have more questions to us, our Shako and our IR team is ready to address. I appreciate your time and commitment. Have a great day.