Mediclinic is on the recovery path

• Covid-19 weighed on group in six months to September, but Mediclinic has seen a rebound in trading since May

Private hospital operator Mediclinic says first-half profits fell about a third after Covid-19 weighed on the number of patients undergoing planned, nonemergency surgical procedures. Mediclinic’s operations in SA were hardest hit but are recovering. Paid patient days in September were about 90% those of the same month in 2019, Mediclinic said. /

Private hospital operator Mediclinic says first-half profits have fallen by about a third after Covid-19 weighed on elective patient numbers, although the situation has improved as lockdown conditions have eased.

An elective surgery is a planned, non-emergency surgical procedure.

The group, which has operations in SA, the Middle East and Switzerland, took a severe hit in the early part of its first half as patients stayed away from hospitals and delayed optional surgical procedures.

Mediclinic ’ s operations in SA, which generate about a quarter of group revenue, were hardest hit, but have since recovered slightly. Paid patient days in September were about 90% of those of the same month in 2019, Mediclinic said in a trading update.

“We have seen a good rebound in trading since May 2020, particularly in Switzerland and the United Arab Emirates (UAE), as the initial peak of the pandemic passed,” said CEO Ronnie van der Merwe. “However, we remain suitably cautious in the midst of uncertainty as to the severity, duration and full impact of the continuing Covid-19 pandemic, as well as its economic aftermath.”

Earnings before interest, taxation, depreciation and amortisation (ebitda), a measure of underlying operational profitability, fell 33% to about £168m (R3.6bn) in its six months to end-September.

Group revenue in reported terms fell 7% from the £1.51bn it previously reported, or 5% in constant-currency terms.

Mediclinic Southern Africa revenue fell 19%, or R1.5bn, from the prior year’s R8.5bn while revenue in Mediclinic Middle East rose 8.5% to about 1.75bn Emirati dirhams (R8bn).

Hirslanden, Mediclinic’s hospital group in Switzerland, sawa 2% fall in revenue from the previous year’s 871-million Swiss francs (R15.8bn).

In Switzerland and the UAE, the easing of restrictions on non-urgent elective surgical procedures coincided with the initial peak of the pandemic passing and resulted in a strong rebound in patient activity, the group said.

Since June, Mediclinic Middle

East and, to a lesser extent, Hirslanden, benefited from counterseasonal holiday trends resulting from travel restrictions imposed and procedures delayed as a consequence of the lockdown.

In addition, Mediclinic Middle East benefited from rapidly deploying supplementary services aimed at meeting patients needs and changing behaviour, such as pharmacy home delivery, and two newlaboratories to provide additional Covid-19 testing capacity.

Mediclinic Southern Africa revenue fell to about 60% of prior year levels in April when lockdown measures and operating restrictions were enforced while Covid-19 cases remained low.

With the initial peak of the pandemic passing in early August, surgical case volumes improved, driven by a return in demand for elective procedures, the group said.

This improving trend stabilised towards the end of September with paid patient days recovering to about 90% of prior year levels.

As a result, Mediclinic Southern Africa revenue was down about 6% in September compared with the comparable period in 2019.

In afternoon trade on Thursday, Mediclinic’s share was down 1.54% to R62.13, having fallen almost a fifth so far in 2020.