Mediclinic said it expected its adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) to decline by 8 percent to £0.21 billion (R3.95bn), down from £0.23bn, and revenue to decline by 1 percent to £1.4bn.
On a constant currency basis, Ebitda is expected to be down by 4 percent and revenue to increase by 2 percent.
Adjusted earnings per share is expected to decline by 11.5 percent to 10 pence a share, down from 11.3p compared to last year. The share price at one strage tumbled to R70.99 a share, down from Tuesday’s closing price of R89.
Newly appointed chief executive Dr Ronnie van der Merwe said trading in the first half of the year experienced the customary seasonality in Switzerland and the Middle East.
“In Switzerland, the business continues to adapt to recent regulatory changes in the outpatient environment, which in the period had a greater-than-expected impact on admissions and the insurance mix,” Van der Merwe said.
Its Swiss subsidiary Hirslanden reported a modest growth in revenue, up by 1 percent as a result of weaker-than-expected growth in inpatient admissions of 3.6 percent and revenue per bed day was down by 2.8 percent.
However, the group is expecting a turnaround in Hirslanden with the appointment of Dr Daniel Liedtke as chief executive as of January 1, 2019, and Pierre-Antoine Binard becoming chief financial officer.
“The team are implementing a series of plans to improve performance and enhance future returns,” Van der Merwe said.
The group derives its revenues from Hirslanden, which makes up 47 percent of group revenue, 31 percent by Mediclinic Southern Africa and 22 percent by Mediclinic Middle East.
In Southern Africa, revenue was up around 5 percent to R8bn, up from R7.6bn with in-patient bed days increasing by 0.5 percent and revenue per bed day increasing by 4.5 percent.
In Mediclinic Middle East, revenue was up 5 percent and inpatient admissions up 3.1 percent.
Mediclinic will release its results on November 15.