Netcare looks to telemedicine to soften the financial blow of Covid-19
JOHANNESBURG - Healthcare provider Netcare on Monday suspended its interim dividend for the the six months ended March 31 to preserve liquidity amidst the disruption by Covid-19 as it looks to telemedicine to soften the financial blow of the pandemic.
Netcare’s adjusted headline earnings per share from continuing operations declined 6.3 percent to 79 cents during the period.
However, Netcare said Covid-19 had introduced significant uncertainty and forecast risk for the remainder of the financial year.
Netcare chief executive, Dr Richard Friedland, said: “We continue to learn more about the virus and we are responding to this and many other forms of new research with further, rigorous, precautionary measures."
Netcare said one of the consequences of Covid-19 had been an accelerated need for telemedicine, which enabled clinicians to continue providing care and virtual consultations to patients without exposing themselves, their patients and staff at the facilities to avoidable risks.
"In a post Covid-19 world, the adoption of telemedicine is likely to grow and to this end, Netcare has developed an innovative telemedicine solution."
Netcare said thethe solution is currently being deployed in Medicross and would be completed by the end of May, although this was only partially expected to soften the impact of lower overall general practitioner patient visits in the second half of the year.
"The platform will be rolled out to hospital specialists in June 2020 and to Akeso and Netcare Occupational Health in July 2020," it said.
Although trading during the first five months of the financial year through to the end of February remained in line with expectations and market guidance, the business was effected in March, which saw a drop of R143 million in revenue in that month. Netcare said in March its business was materially impacted by extensive Covid-19 preparations and the
curtailment of patient volumes resulting in lower occupancies from mid-month.
However, despite this revenue from continuing operations for the six-month period improved marginally to R10.7billion from R10.5bn in the previous corresponding period last year. Operating profit was 0.6 percent lower at R1.7bn
Friedland, said, “We remain in a healthy financial position with low levels of gearing and we are well placed to withstand possible operating losses from the uncertain environment introduced by the pandemic.”
At March 31, group net debt, exclusive of IFRS 16 lease liabilities, was at R6.2billion form R6.182m in the corresponding period.
An additional R2.8bn of undrawn committed banking facilities and funding had been secured, increasing available committed undrawn facilities to R4.8bn to bolster liquidity.