Mediclinic earnings down by 30%
DURBAN - Mediclinic International’s interim earnings declined by almost one third, knocked by Covid-19 disruption, but business improved from May onwards and restrictions across its markets eased.
In April lockdown measures were tightened and non-urgent elective surgical procedures were suspended.
The international healthcare services provider said in a trading update yesterday that it expected its underlying earnings before interest, tax, depreciation and amortisation (Ebitda) to decline by 33 percent for the six months to end September compared to last year’s Ebitda of £252 million (R5.4 billion), with an Ebitda margin of 12 percent, compared to last year’s 16.6 percent. However, business improved from May onwards and restrictions across its markets eased, enabling the safe reintroduction of the group’s diverse service offering.
“Given the underlying demand, this resulted in a strong rebound in operating performance in Switzerland and the United Arab Emirates (UAE) as the initial peak of the pandemic passed, tempered by a slower recovery in Southern Africa with the initial peak of the pandemic passing more recently,” the group said.
Its revenue is expected to decline by 7 percent, down from last year’s £1.52bn. Mediclinic said it delivered a robust performance, underpinned by demand for its healthcare services, supplemented by an expanded offering aimed at meeting patients’ needs and changing behaviours despite the Covid-19 outbreak.
Chief executive Dr Ronnie van der Merwe said Mediclinic expertly navigated one of the most challenging periods for healthcare globally.
“The group delivered a robust first-half operating performance maintaining operational agility and financial strength while continuing to execute on our strategy. We have seen a good rebound in trading since May particularly in Switzerland and the UAE as the initial peak of the pandemic passed. However, we remain suitably cautious in the midst of uncertainty as to the severity, duration and full impact of the continuing Covid-19 pandemic, as well as its economic aftermath,” Van der Merwe said. Cash and available facilities remained strong at around £450m on a comparable basis at the end of September.
Mediclinic Southern Africa, which includes South Africa and Namibia, said the division’s revenue declined by 6percent in September, recovering from a 60percent decline in April when lockdown measures and operating restrictions were enforced while Covid-19 cases remained low.
However, with the initial peak of the pandemic passing in August, surgical case volumes improved, driven by a return in demand for elective procedures. “This improving trend stabilised towards the end of September with paid patient days recovering to around 90percent of last year’s levels,” the group said.
In Switzerland and the UAE, the group said the easing of restrictions on non-urgent elective surgical procedures coincided with the initial peak of the pandemic passing and resulted in a strong rebound in patient activity.
Mediclinic shares closed 2.30percent lower at R61.65 on the JSE yesterday.