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Medi-Clinic earnings get a boost

Johannesburg - International hospital group Medi-Clinic Corporation [JSE:MDC] lifted diluted headline earnings per share by 64% from 105.6c to 173.9c for the 12 months ended March 2010.

Group revenue increased by 5% from R16.351bn to R17.141bn for the year under review. Core operating income before interest, taxation, depreciation and amortisation (EBITDA) was 9% higher at R3.736bn.

Core headline earnings rose by 37% to R852m (2009: R624m). Core basic headline earnings per ordinary share increased by 36% to 151.8c (2009: 111.5c).

The Group said the results had benefited from two one-off items:
  • An adjustment to the Hirslanden pension funds' payout ratio, resulting in a past service cost credit, calculated in terms of IAS 19, to the income statement of R97m and R76m after provisioning for taxation.
  • The tax rates in two cantons in Switzerland were decreased, resulting in a release of R100m from the deferred tax account as a credit to the taxation charge in the income statement.
Taking into account these two one-off items, EBITDA was 12% higher at R3.833bn.

Headline earnings rose by 65% to R1.028bn. Basic headline earnings per ordinary share increased by 64% to 183.1c (2009: 111.5c).

The total dividend declared for the year was 73c per share versus 105.6c last year.

Medi-Clinic said that at constant exchange rates core EBITDA, core headline earnings and core basic headline earnings per share would have been R4.099bn, R870m and 154.8c per share, respectively
10%, 2% and 2% higher than reported.
 
The group's major co-shareholder in Emirates Healthcare, Varkey Group Limited, exercised its option to purchase 50% less 1 share of the cumulative, variable rate, participating, redeemable, convertible preference shares issued by Emirates Healthcare to the group on 27 March 2007, demonstrating its confidence in the business, Medi-Clinic said.

The purchase consideration, determined by an independent investment bank, was R106m resulting in a gain on the sale of the shares of R28m which is excluded from headline earnings. These preference shares represent 8% in the fully diluted equity capital of Emirates Healthcare. All the preference shares issued by Emirates Healthcare converted to ordinary equity capital on 28 March 2010.

  - I-Net Bridge
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