Mediclinic shares climb after it says it has stemmed the losses from Abu Dhabi
Company says the macroeconomic environment remains weak and medical scheme membership is stagnant
Mediclinic’s share price jumped more than 4% on Thursday morning after the private hospital operator released a trading update saying it had stemmed the losses from its Abu Dhabi acquisition.
Mediclinic did not provide a forecast for how much its earnings were expected to rise or fall when it reports on May 24, but said its operations "all performed in line with expectations" during the year to end-March.
Its Middle East operations would report an 8% decline in revenue to 3.1-billion United Arab Emirates (UAE) dirham (about R11.4bn), the update said.
Mediclinic Middle East expects depreciation and amortisation of about 175-million UAE dirham and net finance costs of about 30-million UAE dirham.
Its Southern African operations grew revenue 6.8% to R14.4bn with inpatient bed days increasing 0.9% and revenue per bed day increasing 5.8%.
"These results were delivered against a continued weak macroeconomic environment, stagnant medical scheme membership and increased competition in the private healthcare sector," the trading update said.
Hirslanden grew revenue 3.5% to Sf1.7bn (about R22.8bn). Its patient bed days fell 0.7% but revenue per bed day increased by 3%.
Its 29.9%-owned UK hospital group Spire Healthcare is expected to contribute £12m profit.
"Mediclinic’s largest two platforms, Switzerland and Southern Africa, in addition to our Dubai business, all performed in line with expectations during the 2017 financial year," CEO Danie Meintjes said.
"However, as previously announced, the Abu Dhabi business underperformed having been impacted by a major regulatory change in addition to certain business and operational challenges. We have been focused on resolving these issues and stabilising performance in the Middle East. Our confidence in the long-term growth opportunities of the region remains strong and we currently expect performance in the Middle East to improve as we progress through the 2018 financial year."