Mediclinic shares dive on Swiss unit
But group posts 26% rise in profits
SHARES at South Africa’s biggest private health company, Mediclinic International, fell yesterday after it reported that tariff changes had hit profits at its Swiss unit.
The almost 8 percent decline in the share on the JSE yesterday, overshadowed strong financial results with gains in earnings, sales and group profit. Mediclinic shares on the JSE closed 7.87 percent down at R111.11 yesterday.
The normalised operating profit before interest, tax, depreciation and amortisation margin of Hirslanden dropped to 19.4 percent from 20.8 percent in the year to March.
The margin was negatively affected by the national outpatient tariff last October, the company said.
Hirslanden operates 16 private hospitals in Switzerland.
Mediclinic, which also operates in the Middle East, posted a 26 percent boost in profits in the year to March, underscoring a strong demand for quality health care.
Benefited
Profit for the year to March rose to R4.5 billion up from R3.6bn in the previous year. Full-year earnings rose 9 percent as it grew its Swiss arm and benefited from a weak rand.
The average rand-Swiss franc exchange rate was R11.91 compared with R11.05 for the comparable period last year, while the average rand-United Arab Emirates dirham exchange rate was R3.01 compared with R2.76 for the period.
“We continue to invest for growth across our platforms in anticipation of the continuing increase in demand for cost effective quality health care,” Mediclinic chief executive Danie Meintjes said.
In southern Africa, Mediclinic spent R1.131bn on capital projects, up from R577 million, while R305m was spent on repair and maintenance compared with R289m last year.
Building projects at various hospitals during the year under review increased the number of beds by 271 to 7 885 from 7 614 last year. About 176 beds were added in March.
“The number of beds is expected to increase from 7 885 to 8 044 during the next 12 months. Building projects in progress, which should be completed during the next financial year, will add 159 additional beds,” Meintjes said.
Inquiry
The final dividend per ordinary share increased by 11 percent to 75.5 cents. Normalised diluted headline earnings per share rose to 400.6c for the year to March from 367.8c last year.
A Competition Commission market inquiry is under way into South Africa’s private health-care sector. Mediclinic said it had submitted comments on the submissions of other stakeholders.
“Mediclinic has the assistance of expert legal and economic advisers and we believe that we are well prepared to participate… in the inquiry,” Meintjes said.
Southern Africa has submitted comprehensive comment on the draft regulations.
“We support this initiative and believe this to be a positive development that should en- hance the quality of care in both the public and private health-care sectors once it has been implemented successfully.”