Mediclinic’s operating profits fall by double digits
Investec is dual listed in London and Johannesburg, with Investec Plc representing its non-southern Africa operations, and Investec Limited the rest, although the group operates as a
CAPE TOWN - Mediclinic, which operates hospitals in Switzerland, the Middle East and Southern Africa, reported an operating profit fall of double digits for its half-year to end-September, also opting not to pay a dividend, given it expects to delist from the JSE in the first quarter of 2023.
Adjusted operating profit fell 11 per cent to £131 million (R2.7 billion) in the six months to end-September, Mediclinic reported on Wednesday. The firm said it took a hit from increased employee costs incurred due to COVID-19-related staff absenteeism, a general nurse shortage in Switzerland, as well additional headcount related to capacity expansion in the Middle East.
Profit
The group fared better in SA, where operating profit picked up three per cent to £71 million, which it said reflected a pickup in client activity, while issues around COVID-19 are receding. The average length of stay was down 13.2 per cent compared with the prior year period, reflecting the decrease in longer stay COVID-19 patients and a significant increase in day single entity.
“This highlights the progress we have made in executing capital optimisation strategy as we continue to case admissions.
Mediclinic, which started in SA in 1983 but has its primary listing in London, opted not to declare a dividend, given its takeover agreement means that any dividend would allow its buyers to adjust their offer.
In August, Mediclinic and a consortium of shareholder Remgro and shipping company MSC reached agreement on a buyout offer that valued the firm at about R75 billion at the time, with only approval from SA regulators return excess capital from the South African balance sheet to shareholders,” said Investec Chief Executive Officer (CEO) Fani Titi during an still outstanding. That offer represented a premium of 35 per cent to its share price in late May, when the consortium made its first offer.
Warned
The firm warned on Wednesday that macro-economic uncertainty, inflationary pressures and the risk of further COVID-19 and -related disruptions to staffing and scheduling, will likely impact the previously anticipated sequential increase in patient activity in Switzerland and Middle East, and limit the group’s ability to fully offset incremental cost increases in the two divisions. Mediclinic owns 74 hospitals, five subacute hospitals, three mental health facilities, 21 day case clinics and 23 outpatient clinics.
The firm had 17 hospitals in Switzerland at period end, 50 in southern Africa, and seven in the Middle East.
In addition, under management contract Mediclinic Middle East will open a 200bed hospital in the Kingdom of Saudi Arabia in 2023.