Johannesburg - Mediclinic International, the company that came out of the combination of SA’s biggest private healthcare provider and Abu Dhabi’s Al Noor Hospitals, says its Middle East integration is going well.
The company wrapped a reverse takeover of Al Noor in February, which gave it a listing on the London Stock Exchange and a place on the FTSE 100 Index. It now operates 73 hospitals and 45 clinics in South Africa, Namibia, Switzerland and the UAE, where it is the biggest private healthcare provider.
However, in an update to shareholders on Friday, it said, although it is now unlocking synergies between its two operations as it moves ahead with integration, it says revenue from the new unit will be lower than expected.
CEO Danie Meintjes says, “despite the short term challenges we are currently facing in Abu Dhabi, Mediclinic is well acquainted with the process of business integration along with operational and business alignment. We remain confident in the successful integration and growth of the business.”
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Mediclinic says its Middle East unit will now, for the year to March, deliver low to mid-single digit revenue growth and underlying operational margins of mid to high teens, with performance being materially second half weighted.
This, Mediclinic says, is because of high competition for key personnel, which leads to vacancies.
“The loss of doctors before completion of the combination has stabilised during the period of integration. Management has aligned business practices and implemented a recruitment process, in line with the Dubai operations.”
In addition, it notes the largest health insurer, Daman, instituted a 20 percent co-payment for Thiqa members using private healthcare facilities from July 1.
This, it says, “is likely to have an impact on patient mix and volumes. Mediclinic continues to engage with the relevant stakeholders in this regard.”
Another compounding factor is that there have been delays in getting new beds commissioned.
It notes, however, trading conditions in Southern Africa, Switzerland and Dubai are inline with expectations.
Mediclinic says, as part of its review of operations post the deal, it has identified facilities that are non-core to the business. Two units are in the process of being sold with further small non-core disposals envisaged, it says.
In Dubai, the Mediclinic City Hospital North Wing expansion, creating an integrated oncology centre as well as additional outpatient services and an additional 27 beds, is now operational. Despite the delay in commissioning, trading in Dubai remains in line with its expectations., it says.
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