Medi clinic hospital in Morningside .photo by Simphiwe Mbokazi 453

Johannesburg - Private hospital group Mediclinic International led its peers in profit growth in the year to March, declaring yesterday a 45 percent jump in its basic normalised headline earnings a share to R3.771.

The second-biggest local hospital group, Netcare, posted a 25.4 percent increase in its adjusted headline earnings for the year to September last year and on Monday reported a 19.5 percent increase for the six-month period to March.

Life Healthcare posted a 17.4 percent increase for the full year to last September and a 16 percent increase for the interim period ended in March.

Mediclinic grew its normalised operating profit before interest, tax, depreciation and amortisation by 23 percent to R6.46 billion, after realising a 24 percent improvement in its normalised revenue.

Operationally, Mediclinic was also ahead, growing its bed days sold by 5.9 percent in its southern African operations.

But Danie Meintjes, Mediclinic’s chief executive, attributed the growth partly to the fact that this was the first set of full-year results the group had published since its debt restructuring in 2012.

“The debt we acquired has a much lower rate… And with the rand weakening so strongly, it impacts our results more positively when we report in rands,” Meintjes said.

But besides the local operational performance, Mediclinic’s international expansion – its acquisition of the minority interests in Mediclinic Middle East and the expansion of the Swiss operations – gave it an advantage relative to its local competitors.

Meintjes said more than 60 percent of revenue and earnings were being generated in Switzerland and the United Arab Emirates (UAE).

Last year, the Swiss operations contributed 41 percent to the group’s revenues and this increased to 52 percent this year. The Middle East’s contribution increased by 1 percentage point to 11 percent.

Mediclinic Middle East increased its normalised revenue by 37 percent in rand terms and contributed R523 million to Mediclinic’s group attributable income, compared with R232m in the year before.

The Hirslanden operations in Switzerland contributed R1.35bn to attributable income, almost double the R706m contribution made during the previous year.

The contribution of these two markets was also boosted by exchange rate movements, as the average rand/Swiss franc exchange rate weakened by approximately 22 percent. The average rand/UAE dirham exchange rate also weakened by around 19 percent over the comparative period.

The Swiss market, although mature, still increased sold bed days by 5.5 percent and the Middle East increased in-patient hospital admissions.

Meintjes said even though Mediclinic believed diversifying helped boost profitability when the South African environment was not conducive to growth, the group would keep investing in South Africa because the expansions it had completed had delivered satisfying returns.

Mediclinic Southern Africa grew its revenue by 11 percent to R11.2bn and contributed R984m to normalised attributable income, compared with R901m in the previous year.

Operations benefited from a 5.9 percent increase in bed days sold and the fact that patients spent on average 5.4 percent more on their hospital stay.

Meintjes said even though patients paid more for their hospital stay, Mediclinic was satisfied that its price increases were below the consumer inflation rate, let alone the medical inflation rate.

The stock rose 2.05 percent to close at R79.60 yesterday.