JOHANNESBURG - South Africa’s Netcare Ltd said on Monday its first-half results for 2020 would take a hit from hospital network arrangements and reported higher full-year headline earnings per share, in line with its forecast.
The private hospital firm said headline earnings per share more than tripled to 165.9 cents for the year ended Sept. 30, compared to last year when its earnings were hit by costs related to selling its interests in UK’s BMI Healthcare.
Adjusted HEPS rose to 171.2 cents, compared to 158.1 cents last year. Headline EPS is the main profit measure in South Africa and strips out certain one-off items.
Netcare said 2019 hospital network arrangements will impact the first quarter of next year, but the company had secured participation as an anchor provider in new restricted hospital networks which is expected to have a positive impact.
It also expects an about 50 million rand increase in central costs next year, and will take a one-off, non-cash IFRS 2 charge of 347 million rand from a broad-based black economic empowerment transaction.
The hospital and emergency services division, the company’s biggest, registered a 3.7% rise in patient days, which represents customer stays in its hospitals.
Normalised group earnings before interest, tax, depreciation and amortisation (EBITDA) rose 4.3% to 4.39 billion rand, while the normalised EBITDA margin was unchanged at 20.3%.
Netcare, which competes with Life Healthcare and Mediclinic, last year decided to exit the UK and offload its interests in BMI Healthcare, while a sale process for the GHG PropCo 2 assets is underway.