Mediclinic Middle East earnings ‘will be lower’

CAPE TOWN — In line with previous guidance, private hospital group Mediclinic International says first-half earnings from its Middle East business will be lower than originally expected.

Mediclinic owns hospitals in Southern Africa, Switzerland and the Middle East. It combined with Middle East hospital group Al Noor in February and reverse-listed on the London Stock Exchange, with a secondary listing on the JSE.

It warned earlier in September revenue from the new business had been lower than anticipated due to staffing issues, a new co-payment policy at health insurer Daman and a six-month delay in ramping up Al Jowhara Hospital, all expected to cost it 75-million dirham ($20.4m) in lost revenue.

On Tuesday, it issued a preclose trading update for the five months to August 31, ahead of the release of its interim results on November 10.

Total revenue for the first five months of the fiscal year was 1.315-billion dirham in the Middle East business, and firsthalf earnings before interest, tax, depreciation and amortisation (ebitda) margins were expected to be about 11% in this segment of the business.

In the Swiss business, Hirslanden, revenue for the first five months of the fiscal year was Sf677m. Ebitda margins for the six months to September 31 were expected to remain stable compared with the matching period in 2015.

Mediclinic’s Southern Africa business recorded revenue of R6.054bn. It was expected to deliver slightly lower ebitda margins than 2015’s 21.6%, reflecting price increases in pharmaceuticals and higher staff salaries, it said.