Mediclinic profit soars one-third after Middle East and UK expansion
Private hospital group Mediclinic International’s expansion into the Middle East and UK resulted in both its revenue and profit jumping 30% in the year to end-March.
Measured in pounds, Mediclinic’s Swiss subsidiary Hirslanden contributed 48% of the group’s £2.7bn revenue and 58% of its £243m net profit, its results released on Wednesday morning showed.
Its Southern African division contributed 28% of revenue and 34% of profit, and its Middle East division 24% of revenue and 9% of profit.
Revenue from its 29.9%-owned UK hospital group Spire Healthcare was not added to Mediclinic’s top line, but its British associate’s net profit contribution doubled to £12m from £6m, accounting for 5% of the group’s total.
Mediclinic’s merger with Abu Dhabi’s Al Noor in February helped its Middle East division nearly double revenue to £648m from £328m. However, its woes with the government requiring state medical aid users to pay 20% of private hospital bills resulted in net profit from the Middle East plunging 62.5% to £21m from £56m.
In SA and Namibia, Mediclinic operated 52 hospitals and two day clinics at the end of its financial year.
With a total of 8,095 beds and 16,848 employees, Mediclinic said it was the third-largest private hospital provider in Southern Africa.
But measured by market capitalisation, Mediclinic’s R106bn makes it far larger Life Healthcare at R41bn and Netcare at R39bn.
Mediclinic said its Southern African division grew revenue 7% to R14.4bn. Bed days sold and average revenue per bed day increased 0.8% and 5.8%, respectively.
"Admissions increased 0.6% with growth in medical cases partially offset by a decrease in surgical day cases as the outmigration trend continues. The average length of stay increased by 0.2%," the results statement said.
Subsequent to its financial year end, on April 28, Abu Dhabi’s crown prince reversed the 20% co-payment rule with immediate effect, which should improve Mediclinic’s coming interim results.
"A key focus during the year has been integrating the Abu Dhabi-based Al Noor hospitals group with the established Mediclinic Middle East business in Dubai," the results statement said.
"The regional management team successfully addressed a number of key issues including the establishment of a clear operational and clinical strategy in Abu Dhabi, doctor vacancies, integrating the functional departments of the two businesses, conforming revenue cycle management with the Middle East business, identifying synergies in procurement and headcount and consolidating the two corporate offices and executive management teams."
Mediclinic declared a final dividend of 4.7 pence, maintaining its total for the year at 7.9p.