9th Sep 2016 06:15
LONDON (Alliance News) - Private healthcare company Mediclinic International PLC on Friday warned revenue growth in its Abu Dhabi unit will be slower than expected in its current financial year amid a series of challenges faced by the business.
The FTSE 100 group said trading has been in line with its expectations in its South Africa, Switzerland and Dubai operations since the start of its financial year.
Mediclinic said it has made good progress in integrating Al Noor Hospitals, the London-listed, Middle East-focused healthcare company that Mediclinic bought last year. The group said further synergies have been identified in the merger, with a revised estimate of AED75 million in annualised cost savings for the company, compared to AED50 million previously.
However, Mediclinic said revenue growth in its Abu Dhabi operations in the year to the end of March 2017 will be lower than previously expected. This is due to significant competition for clinical personnel in the region, an impact on patient mix and volumes resulting from a 20% co-payment policy instituted by Abu Dhabi health insurer Daman, and a delayed ramp up of new units in the region.
As part of the review Mediclinic undertook after buying Al Noor, it said it will sell off two units considered non-core to the group, which also will hamper revenue in Abu Dhabi by AED50 million in the current financial year.
Mediclinic said it expects low-to-mid-single-digit revenue growth for the current financial year at Mediclinic Middle East, with a significant weighting of its results to the second half and an earnings before interest, taxation, depreciation and amortisation margin in the mid to high teens. Its medium-term expectations remain unchanged.
"The combination of Mediclinic Middle East and Al Noor has created a leading private healthcare platform with exposure to a region with highly attractive long-term sustainable growth opportunities. Despite the short term challenges we are currently facing in Abu Dhabi, Mediclinic is well acquainted with the process of business integration along with operational and business alignment. We remain confident in the successful integration and growth of the business," said Mediclinic Chief Executive Danie Meintjes.
By Sam Unsted; [email protected]; @SamUAtAlliance
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