Virus weighs on Netcare revenue

The average length of stay of a Netcare patient with Covid-19 requiring an intensive-care bed decreased from 17 days to six days and, even at the height of the epidemic, the hospital group occupancy remained below half. The shorter hospital stays meant that death rates and patient stays were lower than initially anticipated, SA s third-largest hospital

’ group said. Netcare released a trading statement for the 11 months to August, showing how the Covid-19 response had dropped revenues by 12%.

The average length of stay of a Netcare patient with Covid-19 requiring an intensive-care bed decreased from 17 days to six days, and, even at the height of the epidemic, the hospital group occupancy remained below half.

The shorter hospital stays as a result of improved treatment meant death rates were lower than initially anticipated, SA s

’ third-largest hospital group said.

Netcare released a trading statement for the 11 months to August, showing how the Covid-19 response had dropped revenues by 12%.

Earnings before interest, taxes, depreciation and amortisation fell by 50.8% and operating profit by 61.5%.

From April to August, the hospital group cut surgery, which accounts for 60% of its patients, to cope.

But even at the height of the coronavirus pandemic in July, group hospital occupancy was at 49.3%.

Netcare said on Tuesday it had seen a gradual improvement in performance since the easing of lockdown regulations from May, as hospital occupancy increased.

Average occupancy levels increased in September, with an average full-week occupancy of 49.7%, and 52.7% during weekdays before the long weekend, Netcare said. Acute hospital occupancy fell to 32.5% during level 5 of the lockdown in April.

The group also said if there were second-wave infections it would use a much more nuanced approach to treating

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Covid-19.

It did not expect to restrict hospital access to other patients.

Our approach to any potential second wave will be far more nuanced and contained in terms of the facilities potentially made available to treat Covid-19 patients.”

Netcare said it had treated 11,913 patients for Covid-19, and of that, 35% had required critical or intensive care.

Treating Covid-19 patients increased revenue per patient by 8.3% as they are more expensive to treat, but overall, in the 11 months to August, the group saw revenue drop by 12.8% and paid patient days decrease by 19.4%. We anticipate that over the

“

next six months, hospital occupancy and margins could continue to be affected by changes in volume and case-mix,” Netcare said in an investor update.

In May, Netcare withheld its interim dividend for the first time since it listed in 1996.

At the close of business, Netcare s share price was down

’

0.71% to R12.60. It has fallen 35% in 2020 so far.