Mediclinic Heart Hospital in Pretoria.Picture: Oupa Mokoena/African News Agency/ANA
JOHANNESBURG - Private hospital group Mediclinic International’s shares fell more than 8percent on the JSE yesterday after the group reported a £644million (R10.7billion) impairment on its Switzerland subsidiary Hirslanden for the year to end-March.

The group said changes in the Swiss market and the regulatory environment gave rise to losses in properties and intangible assets of £84m and £560m, respectively.

It said the changes affected key inputs to the review that gave rise to impairment charges recorded against properties and intangible assets.

As a result, Hirslanden reported a marginal 2percent growth in revenue to CHF1.74m (R17.24bn), while adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) declined by 7percent to CHF318m with adjusted Ebitda margin of 18.3percent.

After the release of the results, the share price responded negatively as it declined to R102.71 a share yesterday afternoon, down from Wednesday’s closing price of R113.61 a share, dipping 8.82 percent on the JSE yesterday to close at R103.59.

Besides operations in Switzerland, Mediclinic has operating divisions in southern Africa, the United Arab Emirates and the UK.

It also holds a 29.9percent stake in the Spire Healthcare Group, based in the UK.

During the period the group reported a 4percent growth in revenue to £2.87bn, up from £2.75bn and adjusted Ebitda £515m increased by 3percent as compared to adjusted Ebitda of £501m reported last year. The group said in constant currency terms, revenue was up 3 percent and adjusted Ebitda was flat.

Adjusted operating profit was up 3percent to £370m as compared to £360m.

Mediclinic said the results reflected a good performance by the group, especially in the second half of the financial year, from southern Africa and the Middle East and a lower contribution from Hirslanden.

Outgoing chief executive Danie Meintjes said he was pleased with the group's performance this year, given the various market and regulatory trends in each division.

“A key achievement was the strong second-half performance in Abu Dhabi which, combined with the continued strong delivery in Dubai and the exciting expansion opportunities ahead, is laying the foundations for further growth across the Middle East division,” he said.

Southern Africa revenue, which includes South Africa and Namibia, was up 5percent to R15.11bn and adjusted Ebitda up 6percent to R3.25bn with an adjusted Ebitda margin of 21.5percent.

- BUSINESS REPORT