SA operations still causing a drag on Advanced Health’s earnings
Advanced Health reduced its halfyear loss by 72 percent for the six months to end December, with the South African operations continuing to cause a drag on the group's results.
Despite this, the group lowered its loss from continuing operations to R5.6 million compared to a loss of R20m reported last year.
Advanced Health said it was moving close to break-even point and profits were highly impacted by International Financial Reporting Standard 16 which has very high interest and depreciation charges.
However, its earnings before interest, tax, depreciation and amortisation improved by 84 percent to R71.9m, up from R39m compared to last year and revenue increased by 30 percent to R340.1m from R261.8m reported last year, with revenue both in Australia and South Africa ahead of last year.
Headline loss a share decreased to 2.16 cents a share compared to a loss of 6.92c reported a year earlier.
Advanced Health said it was establishing itself as a leader in day surgery across South Africa and Australia.
“Private healthcare is currently in a very exciting stage of development and Advanced is positioning itself within the existing healthcare system, filling a gap in the market for day surgery,” the group said.
In its Australian operations, Advanced Health reported a 17 percent increase in patient surgery numbers and revenue improved by 36 percent.
“The main focus has been on cost controls, efficiencies and good cash collections, resulting in a more than 100 percent increase in profits when compared to last year. The day hospital industry remains a strong and viable business sector in the healthcare system, with more than 40 percent of the Australian population having private healthcare cover. Day hospitals remain the competitive option for private patients compared to overnight hospitals,” the group said.
However, its South African operations reported a 19 percent increase in losses to R34.1m, but revenue was also up by 19 percent.
The group said that the main reason for the losses was an inclusion of losses from Harbour Bay of R5.4m, which was not included in December 2019 results.
“Losses were further worsened by the non-capitalisation of R9.6m deferred tax asset from the losses incurred by the entities that are held as disposal groups and on losses incurred by Advanced Health South Africa as they do not meet a definition and a recognition criteria of an asset.
“These losses were capitalised as deferred tax asset in the prior year resulting in a reduction in loss after tax that was reported,” the group said. South Africa patient numbers decreased by 12 percent due to Covid-19.
The share price fell 4.17 percent on the JSE on Friday to R0.23.