Picture: FINANCIAL MAIL
Picture: FINANCIAL MAIL

Private hospital operator Netcare said on Monday it had seen a healthy 5.6% growth in revenue for the six months to end-March, boosted by the inclusion of Akeso Clinics during the period.

Operating conditions in SA’s healthcare sector remains challenging however, with Netcare saying on Monday it expects growth in its second half to be lower than its first, as acute patient day demand is expected to weaken.

The group said its margins should be under pressure in the rest of the year due to stricter management from medical aids, as well as the growth of restricted hospital networks.

Adjusted headline earnings per share (HEPS) for continuing operations fell 3.9% to 84.3c to end-March from the prior comparative period. However, when adjusting for interest income in the prior period related to its former UK subsidiary BMI Healthcare’s debt, HEPS rose 2.4%.

Netcare changed BMI’s accounting status to “discontinued operation” in the first half of its 2018 financial year, which translated into a R4.2bn “noncash profit” in its interim results.

Netcare had announced in March 2018 that it had decided to exit the UK and dispose of its controlling stake in the UK’s biggest private hospital group, GHG, due to tough trading conditions and its inability to negotiate lower rent after five years of talks.

Netcare said on Monday normalised group profit before tax fell 8.6% to R1.54bn during the six months to end-March 2019, while the group’s net financial expenses jumped 186% to R246m.

The hospital group upped its interim dividend to end-March by 6.8% to 47c.

The acquisition of psychiatric hospital group Akeso Clinics provided a boost to Netcare however, helping to provide an 8.5% increase in patient days during the period.

Although acute patient demand is expected to be weak during the group’s second half, Netcare said on Monday growth in demand for mental health services is expected to remain strong.

Although a lower foreign caseload is expected during the period, the company would remain focused on controlling costs, it said.

At 10.45am Netcare’s share price had fallen 0.99% to R23.01, bringing its total losses for the year so far to 12.94%.

With Tamar Kahn

gernetzkyk@businesslive.co.za