Mediclinic Morningside in Johannesburg. File photo: Leon Nicholas
Mediclinic Morningside in Johannesburg. File photo: Leon Nicholas

Mediclinic shares up, but revenue dips

By Sandile Mchunu Time of article published Jul 23, 2020

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Mediclinic International surged more than 8percent on the JSE yesterday despite the group reporting a 12percent revenue decline in its southern Africa operations in June as a result of the Covid-19 outbreak.

The diversified international private health care services group said that the pandemic impacted negatively on its profits.

It said southern Africa delivered a 7percent increase in revenue to R17.03billion in the year to end March, while adjusted earnings before interest, tax, depreciation and amortisation was flat at R3.39bn.

However, the group said Covid-19 was likely to impact on its profits going forward.

In April the group announced that it allocated £515million (R10.8bn) cash and facilities available to help it fight the Covid-19 pandemic.

Mediclinic has operations in the Middle East, Switzerland, southern Africa, including South Africa and Namibia. It also has a 29.9percent stake in Spire Health care Group, a London Stock Exchange-listed and UK-based private health-care group.

The group said it experienced improvement in other regions between April and May, following the impact of lockdown and other measures in response to the Covid-19 pandemic.

It said that it also recorded continued improvement in operational performance, demonstrating operational resilience during the pandemic and its aftermath. Mediclinic said as lockdown measures were relaxed, the gradual re-introduction of elective procedures and outpatient activities leads to improved operating performance.

“Switzerland and the United Arab Emirates have passed the initial peak of the pandemic. In June the operating performances at Hirslanden and Mediclinic Middle East, which represents more than two thirds of group revenue, were ahead of the prior year,” the group said.

Mediclinic warned that the severity, duration and full impact of the Covid-19 pandemic and its economic aftermath on all businesses would continue to be uncertain.

“There remains a risk to elective procedures and outpatient activity from a continuation or reintroduction of lockdown and other measures in response to the pandemic, the availability of staff; and a disruption in the supply chain,” the group said.

Mediclinic maintained that it is focused on fulfilling its role as a leading provider of essential health care services during this crisis.

The group is expected to release its half-year trading update in October.

Mediclinic shares rose 15.51percent on the JSE yesterday to close at R61.80.

BUSINESS REPORT

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