Virtual consults boost AfroCentric
Health-care group AfroCentric says its diversification strategy and cost reduction have paid off during Covid-19. The group, which owns Medscheme, SA’s largest health risk management services provider, diversified its service by adding a virtual consultation platform for members and health-care providers.
Health-care group AfroCentric says its diversification strategy and cost reduction have paid off during Covid-19.
The group, which owns Medscheme, SA’s largest health risk management services provider, diversified its service by adding a virtual consultation platform for members and health-care providers.
“We are reaping the rewards of our steadfast focus on diversifying our business across the spectrum of client health needs, lowering costs through innovative tech-based solutions, and realising greater efficiencies in how we do business and deliver our offering,” CEO Ahmed Banderker said.
Headline earnings per share, the main profit measure used in SA, which strips out exceptional items, rose 10.9% to R149.5m in the six months to endDecember, from the same period in 2019.
Banderker told Business Day that the company did not experience a dramatic decline in medical scheme membership during the six months, adding that membership hardly changed towards the year end, and even grew slightly in January 2021.
Medscheme is among SA’s leading medical scheme administrators, with more than 3.9million lives under management. Its clients include Bonitas, Hosmed, and Fedhealth.
While medical scheme membership was expected to fall dramatically, AfroCentric said members are doing everything in their power to retain their existing health cover.
Banderker said the group had expected a spike in unemployment to hit membership. It appeared, however, the economic effects of Covid-19 were felt most heavily by those without medical aid.
Total revenue rose just more than a quarter to R3.9bn, with health-services revenue up 4% to R1.7bn, while health retail revenue gained almost half to R2.2bn, amid a boost from vitamin and chronic medication sales, as well as online activity.
The medicine management contracts won by Scriptpharm, a national pharmacy network, bolstered the profits of the retail segment, while the services segment, which largely comprises medical scheme administration business, managed to keep the lid on costs.
These included the rollout of a VirtualCare app, which enables consultations between medical scheme members and health providers, as well as a WhatsApp solution to communicate with and educate members on Covid-19, the group said.
Banderker said though health-care services revenue grew 4%, operating profit in this segment grew 16.4% to R313m, with AfroCentric expecting to see further benefits from increased efficiencies in the coming months. This includes increased digitalisation initiatives, such as self-service options that reduce strain on call centres, Banderker said.
After a series of acquisitions in recent years, AfroCentric is not actively looking for new ones, he said, though opportunities may arise due to the tough operating environment.
AfroCentric upped its dividend 30.7% to 17c per share, representing about R98m paid out to shareholders. AfroCentric’s share was up 2.08% to R4.90 on Tuesday, having risen almost two-thirds over the past 12 months. This gave the group a market value of R2.82bn.