Mediclinic delivers clean half-year bill of health

Neesa Moodley Moneyweb

Analysts had a muted reaction to Mediclinic’s results for the six months to end-September on Thursday.

They say the results were largely in line with the trading update the company issued last month.

Mediclinic CEO Dr Ronnie van der Merwe said management was pleased with the half-year performance, which saw all three divisions – in Switzerland, Southern Africa and the United Arab Emirates – growing volumes, revenue and Ebitda (earnings before interest, taxes, depreciation, and amortisation). Overall Ebitda stood at £222 million, up 4% from the comparable period last year.

Roy Campbell, an equity analyst at RMB Morgan Stanley, said the solid cash flow and earnings per share, which remained flat at 10.3 pence, was slightly ahead of his expectations.

“A solid cash flow conversion has also allowed a CHF [Swiss franc] 86 million paydown of Switzerland debt,” he said.

Campbell noted these were the main “new news aspects of today’s results”, which were incrementally positive.

Roll-out of day case clinics globally

Mediclinic is rolling out day clinics across all its geographies to reduce the burden in acute hospitals by performing short-procedure or diagnostic treatments on a same-day basis.

“Technology allows more power acuity procedures to be carried out in day care settings,” Van der Merwe explained.

“Co-locating day care clinics at our busiest hospitals creates capacity for higher acuity in-patient activity in the hospital.

“These day care clinics have been operating in South Africa for quite some time now.”

Swiss operations drive revenue

The international healthcare provider derived the lion’s share of its revenue (46%) from its operations in Switzerland.

Its Swiss hospital group, Hirslanden, seemed to have finally adapted to the regulatory changes related to outpatient tariff reductions and the outmigration of care.

Mediclinic was currently investigating further expansion in Switzerland via a collaboration with Medbase, the largest primary healthcare specialist in the country.

Southern African revenue was up 7% for the period to R8.56 billion, accounting for 31% of total revenue.

This division opened a new Mediclinic Stellenbosch day case clinic in June.