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Johannesburg - Mediclinic International [JSE:MEI] fell the most in almost a month on concerns of a slow recovery in the United Arab Emirates and weaker patient growth in Switzerland.
In the Middle East, revenue fell 8% in the year through March, the hospital operator said in a statement on Wednesday. Trading in the region was hurt by the departure of about 157 Abu Dhabi doctors ahead of last year’s merger with Al Noor Hospitals and regulatory changes such as a required upfront payment for some patients.
Total sales rose 15%, excluding currency moves.
“It will take time for the UAE business to recover,” Deutsche Bank analysts Marc Hammoud and Letlotlo Lenake wrote in a note, while cutting their recommendation on the stock to hold from buy. “Intensifying competitive landscapes in South Africa and Switzerland make for a challenging operating environment,” they said.
Shares of Mediclinic, which also owns almost 30% of Spire Healthcare in the UK, fell 3.7% to 836.50 pence as of 11:13, paring the gain this year to 8.5%. That’s the steepest fall since April 28.
Mediclinic reported a decline in both the number of bed days sold and the average length of stay at its Swiss business, which accounts for almost half the company’s revenue. In southern Africa, which generates 28% of sales, Mediclinic reported marginal increases by both those measures. Netcare [JSE:NTC] last week reported a 1% decline in patient days sold.
Mediclinic maintained the full-year dividend at 7.9 pence a share.
The outlook “points to challenging conditions across its platforms, while a gradual recovery in the UAE over time may disappoint those who may have expected a stronger” rebound, UBS analyst Kane Slutzkin wrote in a note.
Mediclinic shares were trading 4.10% down at R141.69 at 11:59 on the JSE.
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