Mediclinic, the international private hospital group owned by Remgro and Mediterranean Shipping Company (MSC), said Friday that there had been a marginal improvement in its performance in the second half of the financial year to March 31, 2024.
Remgro released Mediclinic’s results for the six months to September 30, 2023, on Friday, as well as an outlook for the second half, because Mediclinic is a big contributor to Remgro’s results, which are likely to be released soon. Mediclinic delisted in June last year.
“Mediclinic continues to navigate the post-pandemic environment, which has introduced both macro-economic and sector-specific challenges. With its diversified portfolio and expanding footprint across the continuum of care, Mediclinic remains highly focused on revenue growth and delivering operational and cost-efficiencies,” Mediclinic’s board said in the results.
Investment group Remgro, in a trading statement last week, forecast its adjusted headline earnings per share – adjusted for corporate actions – would decline between 8% and 15% for the six months to December 31, to between 492 cents and 533 cents, compared with 579 cents the prior year.
The decrease was largely driven by the loss contributed by Heineken Beverages compared to the profit contribution from Distell in the comparative period, a lower contribution from Community Investment Ventures Holdings Proprietary, and a special dividend received from FirstRand of R154m in the comparative period.
Mediclinic’s directors said Friday that in Switzerland, its Hirslanden business expected to deliver revenue for 2024 broadly in line with the 2023 year, while the earnings before interest tax and amortisation (Ebitda) margin was expected to fall to 13% from 14.7%.
Mediclinic Southern Africa expected to report revenue growth of around 6% and an Ebitda margin of around 18%, down from 19.4% a year before.
Mediclinic Middle East expected revenue to grow by about 9% and the Ebitda margin to be around 14%, from 14.4% the previous year.
Mediclinic’s headline earnings fell 55% to $44 million (R826m) in the six months to September 30, 2023. Adjusted earnings were flat at $81m.
This had followed 5% growth in group revenue to $2.2 billion. Adjusted Ebitda decreased 4% to $285m.
Directors said Mediclinic’s performance for the six months to September 30, 2023 was impacted by a weak performance in Switzerland, partially offset by an outperformance in the Middle East.
Revenue growth had been driven by a 1.3% growth in inpatient admissions and a 3.9% growth in day case admissions, partly offset by lower average revenue per case due to mix changes and below-inflation tariff increases.
“The strong growth in day case admissions confirms the ongoing outmigration of care trend, which the group is addressing through its strategy of expanding across the continuum of care, entering new care settings outside of the hospital environment,” they said.
The softer Ebitda margin reflected a softer revenue performance coupled with increased employee and contractor costs in Switzerland, as well as additional employee and energy costs in Southern Africa, the latter due to increased load shedding.
The first half adjusted Ebitda margin in Switzerland decreased to 11.6% in the first half of the 2024 year, from 13% in the first half of 2023. In Southern Africa it declined to 17.5% from 18.6% and in the Middle East it improved to 11.9% from 11.4%.
Remgro’s shares on Friday fell 0.13% to R141.35.
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