Johannesburg - Private health-care group Mediclinic International’s profit and revenue got a boost from exchange rate weakness in the half-year to September, but the results left investors unimpressed owing to concerns about the company’s profit margins.
Company profit climbed by 12.3 percent to R2 billion when compared with the previous half-year results.
Group revenue rose 16 percent to R19.6bn as the average exchange rate for the rand to the Swiss franc was R13.17 compared with R11.82 for the comparative period, and the average rate for the rand to the United Arab Emirates (UAE) dirham was R3.42 compared with R2.90 for the comparative period.
Mediclinic’s interim dividend a share increased by 16 percent to 36c.
However, Avior Capital Markets analyst Andre Bekker said concerns about the company’s profit margin in Switzerland and tight capacity in the UAE weighed on Mediclinic shares.
Mediclinic shares on the JSE fell by 1.1 percent to close at R118.19.
“If you strip out the effect of the currency, it’s a mixed set of results,” Bekker said.
The results were released after Mediclinic completed a R10bn rights issue, and acquired 29.9 percent in Spire Healthcare Group, a leading provider of private health care with 39 private UK hospitals.
Mediclinic chief executive Danie Meintjes said the group continued to deliver against its key performance indicators with high levels of cash generation, growth in patient activity, stable margins and effective cost control.
“This is against a market backdrop of increasing demand for our services providing geographic expansion opportunities. With both a strengthened balance sheet via a successful rights issue, and capital investments made during the period, Mediclinic remains well positioned for future growth,” he said.
Last month, Mediclinic agreed to combine with Al Noor to create the biggest private health-care provider in the UAE. The £1.5bn (R32.6bn) deal would involve a reverse takeover that gives Mediclinic shareholders a majority stake in the combined operations and a listing on the London Stock Exchange, the companies said at the time.
Growth industry
Mediclinic, which operates hospitals in southern Africa, the Middle East and Switzerland, said all its units had achieved good growth in patient numbers and continued to invest in buildings, technology and people to ensure that the group offered high quality private health-care services to both in- and out-patients.
“Our focus is to ensure that our patients come first, that we continuously improve our value proposition in terms of technology, care and the latest improvements in medicine and surgery. With three operating platforms and a significant investment in the UK, we can leverage best practice in terms of experience, knowledge and skills,” Meintjes said.
Mediclinic said health care was a growth industry globally, supported by an ageing population.
* Additional reporting by Bloomberg and Reuters
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