DURBAN - The Life Healthcare Group took a knock on the JSE yesterday after the private hospital company warned shareholders that its profits would deteriorate further in the second half of its financial year, after falling R160million in the six months to end March.
The share fell 2.68percent to R17.80 after it withdrew its earlier guidance for the year, saying the impact of the coronavirus pandemic on its business would be worse than anticipated in the second half of the financial year. It said its earnings before interest, tax, depreciation and amortisation (Ebitda) were expected to fall between R2.75billion and R2.87bn in the six months to end March from R2.73bn. The group suffered a R240m knock on its revenue as a result of Covid-19.
Life Healthcare said its revenue was projected to increase between 4.4percent and 7.8percent to between R12.95bn and R13.37bn from R12.4bn last year.
“The Covid-19 pandemic has had a significant impact on the trading operations in the group in quarter two of this financial year,” Life Healthcare said. “Due to the diverse geographical locations of the group’s operations, the timing of the spread of the virus within these locations and the responses of the respective governments, the impact has been varied across the regions.”
Life Healthcare has operations in Southern Africa and international units that include Alliance Medical Group in the UK and Scanmed in Poland. It said the Southern Africa business would deliver revenue growth of between 5.1 and 7.4percent to between R9.3bn and R9.5bn. Last year, the business delivered R8.85bn.
Its paid patient days achieved a 0.2percent growth compared to a 0.3percent decline last year.
Its normalised Ebitda before IFRS 16 was expected to grow by between 3.1 and 6percent to be between R2.17bn and R2.23bn, up from R2.1bn compared to 2019.
The group’s international operations were expected to grow revenue by between 2.8 and 8.6percent to be between R3.5bn and R3.7bn, up from R3.41bn compared to a year earlier.
“This increase was driven by the strong growth in PET-CT scan volumes - about 14percent - in the UK; the acquisition of scanning facilities in December 2018 within the UK; and the weakening of the rand against the pound sterling and the euro,” the group said.
It said international normalised Ebitda before IFRS 16 would decline 7.5percent or increase by 1.5percent, while normalised Ebitda would fall between R620m and R680m compared to last year’s R670m.
The group is to release its results next month.