Picture: REUTERS
Picture: REUTERS

Private hospital group Life Healthcare is cutting capital expenditure and holding on to its interim dividend, saying the Covid-19 pandemic cost it R264m in foregone revenue during its half year to end-March.

As patients shy away from hospitals the group is bracing for an additional hit to earnings, opting to hold on to cash, after paying about R590m in dividends in its 2019 half year.

The group is also cutting back on non-essential expenditure, only expecting to spend R1.6bn on capital expenditure in its year to end-September, having spent R2.1bn in its 2019 year.

Covid-19 has led to supply disruptions and increased operational costs.

“The group is evaluating the applicability of the growth initiatives in the current trading environment and its view of the trading conditions post-Covid-19,” the group said.

Profit after tax jumped 88% to R936m in its six months to end-March, with group revenue rising 6.8% to R13.2bn. The Southern African business performed well, the group said, benefiting from higher tariffs, and improved patient case mix, which refers to the types of patients treated.

Conditions have deteriorated since March and admissions have dropped significantly, the group said.

SA’s lockdown conditions have eased somewhat, enabling the return of medically necessary surgery and other admissions that have been postponed, the group said, adding it is still too soon to provide any guidance.

gernetzkyk@businesslive.co.za