17th Apr 2019 09:00
LONDON (Alliance News) - Private hospital operator Mediclinic International PLC said Wednesday full year profit is expected to fall amid a challenging market, despite revenue rising on acquisitions and continued expansion.
For the year ended March, Mediclinic expects to record 2.0% growth in reported revenue and 3.5% drop in earnings before interest, taxes, depreciation and amortisation. In financial 2018, Ebitda stood at GBP515 million on revenue of GBP2.87 billion.
On a constant currency basis, revenue is expected to grow 3.5% and Ebitda down around 1.5%.
Its Hirslanden business in Switzerland met its revised full year guidance, with revenue up 2.5% from the CHF1.74 billion reported the year prior. Inpatient admissions were 3.8% higher, but revenue per patient was down 2.2%. Ebitda margin narrowed to 16.0% from 18.3% the year prior.
Mediclinic expects "modest" Swiss revenue growth in the new financial year from the expansion of its bed capacity.
In South Africa, Ebitda margin narrowed to 21.0% from 21.5% with further investment expected to result in this narrowing further to 20.0% in the new financial year. Revenue, however, was expected to be up about 5.0% from the ZAR15.11 billion reported the year prior helped by a rise in inpatient days and revenue per patient.
In the Middle East, Ebitda margin remained stable at 13.0% with revenue rising 7.0% from the AED3.05 billion reported the year prior. Revenue growth is expected to be around 10% in the new financial year.
For major investee Spire Healthcare Group PLC, Mediclinic emphasised the firm had experienced a "challenging" 2018 due to an "unprecedented" decline in UK National health Service revenue and an increase to clinical staff costs. Mediclinic holds a 30% stake in Spire.
Despite this, the accounted share of profit from Spire only reduced to GBP2.7 million from GBP2.8 million the year prior.
"Our group results for the 2019 financial year were in line with market expectations in a challenging healthcare environment," Mediclinic Chief Executive Ronnie van der Merwe said.
"I am encouraged by our operational progress this year, delivering on our strategic objectives," van der Merwe added. "We executed against our growth strategy with investments across the continuum of care in all regions. We opened Mediclinic Parkview Hospital in Dubai and several day case clinics in Switzerland and Southern Africa, and successfully integrated new investments across the group."
"I am optimistic about our future and confident that we will make further progress against our strategic objectives in the next 12 months," van der Merwe continued. "Adapting our business to the changing global healthcare environment is a priority and to this end further selective expansion and upgrade investments will be made across the group."
Shares in Mediclinic were 6.3% higher at ZAR59.95 in Johannesburg on Wednesday, untraded at 303.80 pence in London. Mediclinic will publish full year results on May 23.
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