Covid-19 cost Netcare R143m in lost revenue in March
A plunge in hospital admissions weighed on income, the private hospital group says
Private hospital group Netcare says a sharp fall in hospital admissions in March cost it R143m in lost revenue, with the effect of the pandemic worsening in April, when acute hospital patient days almost halved.
The group has opted against any forward guidance as the pandemic continues, saying on Monday that acute hospital days for April fell 49.5%, while mental health patient days fell 63.3% year on year.
The group said trading was severely disrupted in April. Revenue in the group’s six months to end-March rose 1.8% to R10.7bn.
Profit in its six months to end-March fell 34.2% to R733m, before the effect of accounting changes that bring leases onto the balance sheet.
The group also had a one-off, noncash, share-based payment expense of R348m due to its implementation of a black empowerment scheme in October.
The group said the easing of lockdown regulations in May was having a positive effect.
Level four of the national lockdown commenced on May 1 and has allowed doctors to recommence with medically necessary, time-sensitive surgical procedures. From the beginning of May 2020, acute hospital patient days to date are trending 15% higher than April 2020, the group said.
Netcare has also committed to treating public Covid-19 patients in Netcare facilities on a not-for-profit, cost recovery basis. A process to establish pricing is under way, the group said.
About R150m has been committed to enhance the readiness of its intensive care units and high-care facilities in the form of additional ventilators, specialised air filters and ultraviolet light disinfection robots.
“Additional inventory reserves have also been procured, including adequate levels of personal protective equipment, drugs and consumables,” CEO Richard Friedland CEO.
In morning trade on Monday, Netcare’s share price was up 3.34% to R13.91, having fallen 28.52% so far in 2020. Over the same period, the JSE’s healthcare index has lost 16.27%.
Update: May 25 2020
This article has been updated with additional information and share price data.