Mediclinic shows an 11% decline in its earnings

THE SHARE price of Mediclinic International, South Africa's largest private hospital group, declined on the JSE following the release of its halfyear results for the six months to September.

The group reported an 11 percent decline in underlying earnings to £84 million (R1.59 billion), down from £94m as compared with last year, negatively affected by weakness in its Middle East and Switzerland operations.

The shares closed 1.79 percent lower on the JSE yesterday at R109.45.

Despite the fall in earnings, the group's chief executive, Danie Meintjes, saw a brighter future for the hospital group, as they have been encouraged by the positive operational trends in their Abu Dhabi operations.

“Along with the strong performance from our established Dubai operations, I am confident that Mediclinic Middle East is on track to deliver a strong second-half performance, resulting in revenue growth and underlying earnings before interest, tax, depreciation and amortisation (Ebitda) margin expansion for the year,” Meintjes said.

The group's acquisition of Al Noor in 2015 for $2.2bn (R31.65bn) in the United Arab Emirates saw its revenue in the Middle East business falling by 5 percent to 1.48bn dirhams (R5.8bn).

The group's overall results saw its total revenue increasing 10 percent to £1.41m in constant currency terms.

Headline earnings a share decreased to 8.7 pence a share, down from 14.9p.

Underlying Ebitda was up 5 percent to £232m and interim dividend was maintained at 3.20p a share.

In Switzerland, Hirslanden revenue was stable at 820m Swiss francs (R11.94bn) and underlying Ebitda down 6 percent.

In Southern Africa, revenue increased 4 percent to R7.58bn with underlying Ebitda also up 6 percent to R1.59bn.