Mediclinic bullish about future earnings despite revenue decline
MEDICLINIC expects to deliver revenue and earnings growth across all of its three divisions during the financial year 2022 as the diversified international private healthcare services group continues to battle the Covid-19 impact on its operations.
In the trading update for the year to end March, Mediclinic reported a 3 percent decline in revenue, hurt by the first half, which was significantly impacted by the sudden onset of Covid-19-related lockdown measures.
However, the group improved in the second half and delivered a 1 percent rise in revenue as lockdown measures were eased by the different governments in the regions where the group operates.
Earnings before interest, tax, depreciation and amortisation (Ebitda) margin was 14 percent during the period compared to 17.5 percent reported in 2020.
Chief executive Dr Ronnie van der Merwe said on Friday that Mediclinic continued to effectively navigate the challenges and uncertainties of the pandemic through the tireless efforts of its medical professionals and employees.
“Despite the more severe second wave of the pandemic placing even greater demand on our healthcare facilities and people, we have adapted well through agility and resilience to deliver a solid second half performance with revenue growth of around 1 percent,” Van der Merwe said.
Mediclinic has operations in southern Africa, which includes South Africa and Namibia, Switzerland and the Middle East.
Mediclinic Middle East was a stronger performer during the year by reporting a 9 percent increase in revenue while Mediclinic southern Africa reported a 9 percent decline in revenue, while its Swiss operations reported a 1 percent slide in revenue during the year.
However, Van der Merwe said Mediclinic was well-positioned to deliver growth in revenue and Ebitda across all three divisions in financial year 2022 despite further waves of the pandemic expected in the coming months, especially in Switzerland and southern Africa.
“Throughout the pandemic we have continued to execute on our strategy, accelerating our innovation and digital transformation initiatives and launching numerous new partnerships and collaborations.
“These, alongside our focus on expanding Mediclinic’s integrated services across the continuum of care, support long-term sustainable growth across the group,” he said.
The group reported an increase in cash and available facilities during the second half of the year, to around £670 million (R13.24 billion) at the end of March, up from £661m reported at the end of the first half.
It also managed to reduce its net debt to around £2.20bn, down from £2.33bn compared to last year.
Mediclinic’s share price gained 1.56 percent on the JSE on Friday to close at R63.68.