JOHANNESBURG - Life Healthcare has confirmed that discussions regarding the potential sale of its 49.7percent stake in Max Healthcare in India are progressing well.
It was reported at the beginning of the year that Life Healthcare was considering offloading this stake for R5billion, as India has one of the most underfunded public healthcare systems among the world’s major economies, with around 70percent of patients using private healthcare.
In the results for the six months to end March, the group said on Friday that Max Healthcare reported disappointing results, with the business negatively impacted by the Shalimar Bagh incident in December 2017, resulting in a knock-on effect on the balance of the Delhi business.
“In addition, the increased regulatory environment negatively impacted earnings before interest, tax, depreciation and amortisation (Ebitda) margins. The impact on the group for the period is a R67million loss compared to a loss of R12m in 2017,” the group said.
However, the disappointing performance did not have a negative impact on the group’s overall results.
The group reported a 17.5percent increase in revenue to R11.3billion, up from R9.6bn, while headline earnings per share increased by 116.5percent to 53.7cents a share, up from 24.8c as compared to last year. Earnings per share increased by 329.9percent to 54.6c, up from 12.7c.
Chief executive Dr Shrey Viranna said that going forward, Life Healthcare would continue to expand into complementary businesses and diversify from being predominantly a hospital business to an internationally diversified healthcare provider that offered a compelling range of services. The group declared an interim dividend of 38c a share, up by 9percent, as compared to 35c declared last year.
Life Healthcare Southern Africa increased revenue by 9.7percent to R8.4bn, with the southern African hospitals’ and complementary services’ revenue rising 7.9percent to R7.8bn.
Healthcare services’ revenue increased by 42.4percent to R568m, up from R399m, and the group said this was due to the return of 700 Gauteng mental health patients and the acquisition of an occupational health and wellness business.
In 2016 the Gauteng Department of Health removed patients for Life Esidimeni hospital, which led to more than 100 deaths.
Normalised Ebitda in southern Africa increased by 5.8percent to R2.1bn.
Alliance Medical Group delivered a solid financial performance, with revenue increasing by 56.3percent to R2.3bn and normalised Ebitda up by 26.3percent to R518m. Scanmed revenue increased by 21.5percent to R644m and normalised Ebitda rose to R60m.