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Cape Town - Private hospital group Netcare [JSE:NTC) today reported a 23.2% increase in diluted headline earnings per share to 64.2c for the six months to March 31‚ saying its results were driven by a strong performance in its local operations and the weaker rand.
The results were also affected by the deconsolidation of the group’s UK property business.
Netcare is SA’s third-biggest private hospital group‚ with a market capitalisation of about R33.3bn. Rivals Life Healthcare Group Holdings [JSE:LHC] and Medi-Clinic Corporation [JSE:MDC] have market capitalisations of R37bn and R56.6bn respectively. It also owns a private hospital group in the UK called General Healthcare Group.
Group revenue rose 8.5% to R13.3bn‚ compared with R12.3bn last year. More than half of this increase in revenue (R631m) was attributed to favourable currency swings during the six months under review‚ which saw the rand weaken against the pound sterling by 11.8%.
Netcare CEO Richard Friedland said in a presentation to analysts that although demand for private healthcare in SA remained strong‚ tough economic conditions in the UK had seen a continued decline in the proportion of private sector patients‚ which were more profitable than patients funded by the UK government.
In 2006‚ only 3% of Netcare UK’s patients were referred from the National Health Service‚ while today that figure stood at 32%‚ he said.
Netcare‚ which currently has 9‚266 beds in SA‚ planned to open another 89 later this year. It expected to begin construction on two new hospitals‚ in Polokwane and Pinehaven‚ west of Johannesburg‚ later this year‚ said Dr Friedland.
He welcomed the Competition Commission’s planned market enquiry into the private healthcare industry‚ saying Netcare viewed it as an opportunity for an independent and impartial probe into the functioning of the national health market.
“Netcare trusts that the inquiry will review and address key structural challenges facing the healthcare system such as the relevant regulatory framework‚ the critical shortage of specialists and nurses as well as the fragmentation of care‚” he said.
Netcare declared an interim dividend of 27c
per share‚ up 23c on last year’s 22c per share.
