SA and Namibia lift Mediclinic

Private healthcare group Mediclinic reported strong growth in its southern African operations for the year to March amid a weakened economy, but underperformed in the Middle East.

Private healthcare group Mediclinic reported growth in their southern African operations for the year to March, but underperformed in the Middle East.

Mediclinic is the third-largest hospital group in the country. It operates 49 hospitals and two day clinics in SA and has three hospitals in Namibia and more than 8,000 inpatient beds.

Southern African revenue grew 7% to R14.3m, accounting for 28% of group revenue, which was 30% higher at £2,749m.

The hospital group’s operating platforms are in SA and Namibia, Switzerland and the United Arab Emirates.

CEO Danie Meintjes said the group experienced growing demand for quality healthcare services, underpinned by an ageing population, a growing disease burden and technological innovation. Its southern African revenue increase was driven by a 0.8% rise in bed days sold and a 5.8% increment in the average revenue per bed day. The hospital group had a 0.6% boost in admissions and patients stayed in hospitals longer, increasing the average stay duration by 0.2%.

Gryphon Asset Management portfolio manager Reuben Beelders said while the firm generated a good profit in southern Africa, it was struggling in the Middle East, which accounted for 24% of revenue.

Meintjies said business and operational challenges affected volumes in Abu Dhabi, including the introduction of a 20% copayment system in July 2016, five months after Mediclinic acquired Al Noor Hospital Group for about £1.5bn.

It reported a 19% drop in pro forma revenue in Abu Dhabi where inpatient admissions fell 4.8% while outpatient numbers fell 9.7%. Subsequently, bed days fell 6.2% as a result of the copayment system.

“I believe management have their work cut out for them in the Middle East. The low oil price is going to place growth under pressure,” said Beelders.