Mediclinic remains cautious despite recovery

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Mediclinic remains cautious despite recovery

Published Date: 2020-10-16 | Source: Stephen Gunnion | Author: Stephen Gunnion

Mediclinic remains cautious despite recovery

The private hospital operator expects to report a five percent decline in first-half revenue, weighed down by its SA operations.

Mediclinic says its first-half operating performance was solid as trading at its international operations in particular rebounded in May after the impact of April lockdowns. However, it remains cautious due to the lingering impact of the Covid-19 pandemic.

In an trading update, the private hospital group said revenue and profitability were significantly impacted in April by the sudden onset of lockdown measures and the suspension of non-urgent elective surgical procedures aimed at keeping hospital beds empty for Covid-19 patients. From May, restrictions across its markets eased, enabling it to safely reintroduce more services. Due to underlying demand, this resulted in a strong recovery in operating performance in Switzerland and the United Arab Emirates as the initial peak of the pandemic passed. The recovery was slower at its hospitals in Southern Africa, with the initial peak of the pandemic passing more recently.

Revenue at its Southern African operations fell to around 60% of prior year levels in April but with the initial peak of the pandemic passing in early August surgical case volumes improved. In September, paid patient days recovered to around 90% of prior year levels.

For the six months to end-September, group revenue fell 7% to £1.52 billion while earnings before interest, tax, depreciation and amortisation declined by a third to £252 million. It expects to report earnings per share of 9.9p.

Mediclinic's results are scheduled to be released on 12 November. Its shares fell 2.3% to R61.65 yesterday.





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