Swiss problems result in a huge knock for Mediclinic
Mediclinic's Swiss subsidiary Hirslanden plunged into an operating loss of £54m from an operating profit of £72m
Private hospital group Mediclinic's net loss increased fourfold to £158m in the first half of its 2019 financial year from £40m in the matching period, dragged down by a disastrous performance from its Swiss subsidiary, Hirslanden.
Mediclinic nevertheless maintained its interim dividend at 3.2p.
Good news in the results was that Mediclinic's Middle East division turned to an operating profit of £14m from an operating loss of £16m in the first half of the prior financial year.
But the bad news was its Swiss subsidiary Hirslanden plunged into an operating loss of £54m from an operating profit of £72m.
Operating profit from its Southern African hospitals declined by 4% to £81m from £78m.
The group's overall interim revenue declined 1.3% to £1.4bn, dragged down by revenue from Switzerland — which contributed 46% of Mediclinic's total — falling 3% to £631m.
"The rapidly implemented regulatory changes regarding outpatient tariff adjustments and out migration of care in Switzerland are significantly impacting the healthcare market in that country," Mediclinic CEO Ronnie van der Merwe said in the results statement.
"We are acutely focused on adapting Hirslanden to reflect the future healthcare environment in Switzerland."
Its Southern African division grew revenue 1.1% to £444m. In rand, the growth was 5% to R8bn.
Mediclinic said its Southern African hospitals managed to grow profit "despite weaker than expected second-quarter volumes as a result of fewer winter flu related cases".
In the Middle East, Mediclinic similarly reported 5% revenue growth in local currency, but converted to pounds this translated to a 1% decline to £310m.
"In the Middle East, we continue to gain momentum, supported by revenue growth, selective investment projects that both enhance our facilities and the clinical service offering and strategically expanding our capacity in the region," Van der Merwe said.