Life Healthcare posts 35% profit jump
Johannesburg - Life Healthcare Group Holdings [JSE:LHC] on Tuesday reported a 35.2% rise in diluted headline earnings per share to 52.6 cents for the six months ended March 2011 from 38.9 cents a year ago.
Revenue was 12.7% higher at R4.718bn, while operating profit grew 20.1% to R987m.
An interim cash distribution of 31 cents per share was approved by way of a dividend of 11 cents per share and a capital reduction out of share premium of 20 cents per share.
The group said it continued to grow during the half year with continued expansion of its facilities and supported by the acquisition of the Life Bay View Hospital in Mossel Bay in June 2010.
Increased demand for hospital services and preferred network arrangements supplying additional volumes resulted in paid patient days (PPDs) increasing by 6.4%. This contributed to an improved occupancy of 69.5% from 68.2% in 2010. The increase in activity and a higher revenue per PPD resulted in hospital division revenue increasing by 13.9%.
Healthcare Services revenues declined marginally due to reduced volumes in the Life Esidimeni business as result of the completion of two contracts. This was offset by the increase in value of contracts obtained in Life Occupational Health.
The group said it continued to focus on cost containment to ensure that services remain affordable.
During the first six months of 2011, Life Healthcare invested R235m, comprising capital projects and acquisitions and a further R535m has been allocated for capital projects for the remainder of the 2011 financial year.
A total of 93 beds were added in the first half, with an additional 260 beds projected to be commissioned in the second six months.
During 2010, the Life Beacon Bay Hospital in East London and the Life Orthopaedic Hospital in Cape Town were commissioned and the Life Bay View Hospital in Mossel Bay was acquired. These additional beds contributed to the increased number of PPDs in 2011.
Looking ahead, the group said it is investing in future bed capacity across its acute hospitals, mental health and acute rehabilitation facilities to meet higher demand due to the increasing disease burden, ageing population, the increase in private insured lives and the preferred network arrangements negotiated with the funders.