The multinational private hospital group last week admitted that the operations had affected its bottom line with lower-than-expected patient volumes and operating performance.
Chief executive Danie Meintjes said in a trading update at the end of February that the company was “taking many steps to build the foundations for a successful, sustainable, long-term business in the Middle East”.
The Middle East operation saw the company share price falling nearly 51.72 percent in the last year after Mediclinic navigated through regulatory problems to clinch the transaction in Abu Dhabi.
The stock retreated steadily from the R195.80 recorded on April 13, 2016, to the current levels of around R129 a share.
But last week, Mediclinic clawed back some losses, trading more than 2 percent higher in early morning trade before closing 2.54 percent higher at R128.54. “Mediclinic’s largest two platforms, Switzerland and southern Africa, in addition to our Dubai business, all performed in line with expectations during the 2017 financial year. However, as previously announced, the Abu Dhabi business underperformed having been impacted by a major regulatory change in addition to certain business and operational challenges.
“We have been focused on resolving these issues and stabilising performance in the Middle East.
"Our confidence in the long-term growth opportunities of the region remains strong and we currently expect performance in the Middle East to improve as we progress through the 2018 financial year.”
The company said its operations in Hirslanden, Switzerland, were expected to improve revenue for the financial year to end March by 3.5 percent to some CHF1.7 billion (R22.76 billion), up from CHF1.6bn reported in 2016 with patient bed days marginally lower at -0.7 percent and revenue per bed day increasing by 3 percent.
It said Hirslanden outpatient revenues, which represent less than 20 percent of the overall platform revenues, continued to grow during the year.
The group said its southern African division was expected to increase revenue by 6.8 percent to some R14.4 billion, up from R13.5 billion reported a year ago with inpatient bed days and revenue per bed day increasing by around 0.9 percent and 5.8 percent respectively.
The group said these outlooks were delivered against a continued weak macroeconomic environment, stagnant medical scheme membership and increased competition in the private healthcare sector.
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It said the troubled Middle East operation was expected to see a decline in revenue by 8 percent to some AED3.1 billion (R837 million), down from AED3.4 billion reported in 2016.
The group said as previously announced, while the Dubai business performed well in financial year 2017, the Abu Dhabi business experienced challenging trading conditions.
Mediclinic has a 29.9 percent stake in Spire Healthcare Group. Mediclinic expects the financial year 2017 equity accounted share of profit from Spire to be £12 million (R201 million), up from £6 million reported a year earlier.