R12.1bn cash reserves help sustain Mediclinic

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DURBAN – JSE-listed diversified private health-care services group Mediclinic International said on Friday it had £515 million (R12.1billion) cash and facilities available to help it fight the Covid-19 pandemic.
The group stated that all non-urgent and non-committed capital programmes had been postponed in an effort to support its liquidity.
“As part of the group’s broad response to maintaining its liquidity position through this crisis, and maximise its support in tackling Covid-19, the board has taken the prudent and appropriate decision to suspend the dividend. The board recognises the importance of its dividend to shareholders and will keep this position under review,” Mediclinic said.
The group also suspended its executive directors’ annual salary increases and short-term incentives. Chief executive Dr Ronnie van der Merwe said in a trading update on Friday that the rapid spread of the Covid-19 pandemic was having a dramatic impact on countries and the lives of people globally.
“Mediclinic is at the forefront of tackling this crisis as a leading health-care service provider. I have been encouraged by the group’s ability to adapt and innovate as our experts support the government’s efforts in policy formulation,” he said.
In the trading update for the year to end March, the group said its trading was broadly in line with expectations.
“Performance of the group was in line until mid-March 2020, when the impact materialised from national lockdowns and associated actions suspending non-urgent elective surgery,” the group said.
As a result, Mediclinic reported a 4 percent increase in revenue, on a constant currency basis, while earnings before interest, tax, depreciation and amortisation (Ebitda) declined by 3.5 percent.
Last year, the group reported revenue of £2.93bn and Ebitda of £493m.
The group has operations in Switzerland, southern Africa – including South Africa and Namibia – and the United Arab Emirates. It also has a 29.9 percent stake in Spire Health-care Group, a London Stock Exchange-listed and UK-based private health-care group.
In Switzerland, the group said Hirslanden continued to make excellent progress in adapting the business to the regulatory changes affecting the Swiss health-care system. Hirslanden reported revenue growth of 1.5 percent and inpatient admissions growth of about 0.5 percent. Its Ebitda margin was, until mid-March, ahead of expectations, the group said.
Mediclinic Southern Africa reported a 6.5 percent increase in revenue, driven by an increase in inpatient bed days sold of about 2.5 percent, which largely reflected acquisitive growth across the continuum of care.
Mediclinic Middle East reported a 5.5 percent growth in revenue.

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