Netcare Group has inked a renewable energy (RE) supply agreement with independent clean energy solutions provider NOA Group Trading (NOA) – a significant milestone fro the hospital group, according to its CEO Dr Richard Friedland.
Friedland said in a statement yesterday, “Improvement of our energy efficiency initiatives remains a key focus area of this strategy. Netcare has also committed to procuring 100% of its purchased electrical energy from renewable energy sources by 2030, supporting the Race to Zero global campaign with targets that exceed the requirements of the Science Based Target initiative (SBTi) aimed at limiting global warming.
“This transaction represents Phase 1 of achieving this aim and includes six of our facilities where RE will be wheeled through the electricity grid from a combination of wind and solar farms, covering up to 100% of energy consumption at these facilities. This represents approximately 11% of the Group’s total energy consumption which is currently being supplied by Eskom’s predominantly coal-fired power stations.
“In combination with other initiatives already implemented under Netcare’s sustainability programme, this transaction will increase the proportion of Netcare’s total energy consumption that is derived from RE sources to around 26%,” he said.
Dr Friedland said Netcare’s management teams were actively working towards finding viable solutions to supply RE to the remaining municipal-connected sites in the group while continuing to build on existing renewable energy initiatives.
According to Karel Cornelissen, the CEO of NOA Group, renewable energy will be wheeled through the national grid to the six designated Netcare facilities via the existing Eskom distribution transmission network and delivery of renewable energy to these facilities is expected to commence by the first quarter of 2026. The agreement represents a significant step towards a clean-energy future by one of South Africa’s healthcare industry leaders, and we are pleased to partner with Netcare on this crucial advancement,” he said.
Meanwhile, Netcare yesterday gave an update for the financial year ending September 30, 2023.
Netcare said it was encouraged by the ongoing improvement in the group’s financial performance as demand continued to normalise from the impact of the Covid-19 pandemic.
“The Group continued on the solid trajectory reported in H1 2023 and is on track to meet its FY (financial year) 2023 guidance and strategic goals published with the FY 2022 results and reiterated at the H1 2023 results presentation,” it said.
Despite the constrained economic environment and unseasonal lower activity during June and July 2023, total paid patient days for 2023 were expected to grow by 6.8% against the prior corresponding period.
Total growth in patient days of 6.8% for 2023 was in line with the full-year guidance of 6.5% to 7.5% growth. The acute segment experienced a steady improvement in paid patient days, which increased by 6.1%, equating to 95.2% of 2019.
The steady increase in activity contributed to higher occupancy levels. Full week occupancy for 2023 within acute hospitals was forecast to increase to 63.5% from 59.3% in 2022.
Revenue for 2023 for the group and the Hospital and emergency services segment was expected to grow by 9.0% to 10.0% compared to the prior year’s group revenue of R21.6 billion and Hospital and emergency services revenue of R21bn.
The business remained focused on cost efficiencies and continued to benefit from operating leverage. The underlying year-on-year normalised group Ebitda margin (excluding strategic costs and diesel costs) was expected to strengthen by 125 to 175 basis points from 17.5% the prior year.
Netcare said diesel costs of R113 million for the 11 months to August 31, 2023 would be lower than the guidance provided of R165m for the full year. However, this cost still represented a significant increase against the 2022 cost of R37m.
Netcare said further detail on the Group's financial performance would be provided on or about November 20.