Stellenbosch-based investment firm Remgro has flagged uncertainty about the implementation of the National Health Insurance (NHI) among factors that pose risk to its investments.
The company, which is controlled by Johann Rupert, is the latest to voice concerns about the National Health Insurance bill, which was tabled in parliament in August, and paves the way for the establishment of a central fund that will purchase services on behalf of the entire population.
Remgro owns a stake in private hospital group Mediclinic.
Speaking after the release of the company’s full-year results on Thursday, Remgro CEO Jannie Durand criticised the level of co-operation between government and the private sector in the development of NHI.
Remgro CEO Jannie Durand takes Business Day TV through the investment firm's annual performance.
“The private sector has shown that it can run (health) facilities much better and cheaply. There must be more engagement. We all agree that there is a need to improve the country’s health care,” he said.
Durand said the private sector did not fully understand the NHI. “It is so vague,” he said.
In the year ended June 30, Remgro’s headline earnings per share decreased by 4.2% from 1,512.6c to 1,448.9c. The company has attributed the decrease in earnings mainly to lower earnings from RCL Foods, Community Investment Ventures Holdings, and Total South Africa. .
Durand said fragile economic growth, low business confidence and the influx of chicken and sugar imports had an effect on the group.
“Weak domestic fundamentals remain the key feature of the SA operating environment. Uncertainty remains high with SA’s fragile signs of real GDP growth, a lack of policy reform momentum and fiscal strain against a backdrop of global growth concerns,” he said.
Remgro declared a final dividend of 349c per share, taking the total dividend for the year to 564c per share, up by 6% compared to the 2018 financial year.
RCL Foods’ contribution to Remgro’s headline earnings decreased by 60.7% to R254m. Durand attributed the decrease to the poor performance of RCL’s chicken and sugar businesses.
The local poultry and sugar industries had come under pressure from oversupply, which was driven mainly by cheaper imports and declining local market demand due to muted consumer spending, he said.