Mediclinic’s share drops after Covid-19 strains the group’s acute care capacity
JOHANNESBURG - THE SHARE price of Mediclinic declined by a sharp 3.84 percent to R58.66 after the hospital group reported on Friday that it would continue postponing non-urgent, elective surgeries due to high volumes of Covid-19 patients at its facilities and amid a vaccination row surrounding billionaire Johann Rupert.
The group on Friday said in a third quarter update that it had experienced significant volumes of Covid-19 patients in the Western Cape, KwaZulu-Natal, Mpumalanga, Limpopo and Gauteng, but admissions are starting to show signs of stabilisation in the Western Cape.
It said the number of admitted patients had exceeded the peak of the first wave by 75-100 percent at its 48 hospitals and 11 clinics across the country, with ICU beds and ventilators experiencing the biggest strain.
Two weeks ago, the diversified international private healthcare services group terminated patient treatments for non-urgent elective care after experiencing resource constraints.
Mediclinic, however, said it was well positioned to deliver the services and care required to address patient demand when capacity became available.
The group said it remained cautious as to the full impact on nearterm operating performance as the uncertainty caused by the Covid-19 pandemic has reduced visibility on activity levels.
Mediclinic group chief executive Dr Ronnie van der Merwe said the spike in Covid-19 cases had caused a strain on the group’s acute care capacity.
“Through the third quarter of our financial year, a more severe second wave of Covid-19 cases has placed greater demand on our acute care capacity,” Van der Merwe said.
“We continue to effectively navigate the challenges this presents.”
Mediclinic’s group revenue rose by 2.5 percent for the third quarter period between October and December of the financial year ending March 31, 2021.
Earnings, before interest, taxes, depreciation, and amortisation rose 8 percent, with a 17 percent margin in the quarter compared to 19 percent the previous financial year.
The group said its revenue growth was supported by unseasonably high inpatient activity in December 2020 at its southern Africa and Middle East operations. However, this was partially offset by lower patient volumes at Hirslanden in Switzerland.
At September 30 last year Mediclinic comprised 76 hospitals, eight sub-acute and specialised hospitals, 17 day case clinics and 18 outpatient clinics in southern Africa, the Middle East and Switzerland.
The group said the ongoing operational and financial resilience was evidenced by cash and available facilities at the end of December 2020 of around £660 million (about R13.7 billion), flat compared with the end of September 2020.
Van der Merwe said unlike early in the first wave, there had not been national restrictions on elective procedures and outpatient activity during the third quarter.
Swiss newspaper Tages-Anzeiger last week reported that Richemont chairperson Johann Rupert received his first dose of a Covid-19 vaccine from a Mediclinic-owned hospital group, Hirslanden, before the launch of Switzerland’s official vaccination programme.
Rupert’s Remgro group has a 45 percent holding share in Mediclinic.
Hirslanden defended the move in the media, saying Rupert was a test subject due to comorbidities.