Simon Mundy
11 November 2009
Johannesburg — MEDI-Clinic chairman Edwin Hertzog has hailed the private hospital group's "resilience in tough times" after it posted a 15% year-on-year rise in headline earnings per share to 59c for the six months to September.
An interim results statement released yesterday cited a "strong defensive performance" for results, which included a 12% increase in revenue, to R8,4b n.
Medi-Clinic's southern African division, which includes operations in SA and Namibia, made the largest contribution to group turnover, with revenue up 13% to R3,8bn .
The increase was attributed to a 2,4% increase in bed-days sold, and a 12,4% rise in the average income per bed-day, driven by strong increases in the prices of prostheses and scheduled drugs.
Lizelle Wentzel, an analyst at Frost & Sullivan, said Medi- Clinic's solid revenue performance could drive further acquisitions. "Expanding on existing infrastructure is more cost-effective in the current economic climate and it is certain that Medi- Clinic will continue to do this and possibly acquire further hospitals offshore," she told Business Day.
While the number of hospital beds in the division increased only marginally in the period, the figure was expected to increase from 6 859 to 7 028 over the following six months.
This was due largely to the forthcoming opening of the 140- bed Cape Gate Medi-Clinic in the Western Cape, scheduled for February next year.
Medi-Clinic Southern Africa CEO Koert Pretorius said the results showed that the company had not been seriously affected by the recession within SA. "We had an increase in volumes, with the number of patients admitted up 1,3%. This reflects the normal, increasing demand for healthcare services within SA, which has not been affected in any serious way by the recession.
"Job losses during this year have been mostly among non- medical aid clients, and growth in the private healthcare industry has continued."
Pretorius said the proposed national health insurance (NHI) system could present new opportunities for Medi-Clinic within SA. "Even if you add the public and private providers together in terms of beds and professionals, you would not be able to meet the demand that will result from NHI. There's a big role for the private sector to make up that shortfall. Even if there's a shrinkage of the medical aid population, we'll benefit from the NHI fund."
Despite the southern African division's strong performance, group CEO Louis Alberts warned that limited growth possibilities within SA would encourage Medi- Clinic to look to other countries in the region.
"It's not only the regulatory environment, but the market is also fairly saturated. We're growing incrementally within SA, but to really expand on a bigger scale we'll have to look elsewhere."
The company's operations in Switzerland and Dubai also reported rises in revenue, by 5% and 68% respectively. But Hirslanden, the firm's Swiss division, reported a 1,8% fall in inpatient admissions, with a decline in lower acuity cases.
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