Picture: 123RF/LANGSTRUP
Picture: 123RF/LANGSTRUP

Private hospital group Life Healthcare said on Thursday hedging losses on the proceeds from its disposal of Indian hospital group Max Healthcare had taken a bite out of its profits for the year to end-September. 

The disposal of Max Healthcare would result in profit on the sale of about R1.5bn, the company said, but this was reduced by the effect of the mark-to-market loss on the foreign exchange contracts, taken out to protect the proceeds.

This resulted in an after-tax loss of R406m, with headline earnings per share expected to fall as much as 21.9% during the period, while earnings per share could rise as much as 65.7%.

Life Healthcare bought a 26% stake in Max Healthcare for R820m in 2011 and later increased its share to 49.7% as part of efforts by then CEO Michael Flemming to branch out of SA, where a weak economy and job losses had led to a slowdown in demand for private health care.

The company said it was expecting good results for 2019, considering the challenging operating conditions, with revenue expected to rise by between 7.9% and 10.3%.

Revenue in the group’s Southern Africa segment was expected to rise in a range of 6.1% and 7.9%. International revenue was expected to rise by between 10% and 13.2%.

At 10.27am on Thursday, the group’s share price was down 0.69% to R24.49, having fallen 7.23% so far in 2019.

gernetzkyk@businesslive.co.za /With Tamar Kahn