Medi-Clinic posts 19% profit jump

2010-11-09 22:07

Johannesburg - South Africa's second biggest private hospital group Medi-Clinic Corporation [JSE:MDC] posted 19% rise in first-half profit as an increase in acute cases at home offset the stronger rand currency.

Medi Clinic, which also runs hospitals in Switzerland, Namibia and the United Arab Emirates, said on Tuesday headline earnings per share totalled 70.2c in the six months to end-September compared with 59.0c a year ago.

Headline EPS is the main profit gauge in South Africa that strips out certain one-off and non-trading items.

Demand for private healthcare in South Africa has increased in recent years as a fast-growing middle class signs up for health insurance, but the economic slowdown and job losses have blunted self-funded treatments

Medi Clinic said revenue increased 5% to R8.7bn boosted by its home unit, where on average income per bed was higher. In Switzerland, where it runs the biggest private hospital chain, earnings were hit by the stronger rand against the Swiss franc.

The rand has strengthened around 30% since the start of 2009. A stronger rand is a negative for companies like Medi Clinic, because it erodes profits when overseas earnings are brought back to South Africa.

The company said it was more optimistic about its prospects in the next months and continued to invest in its divisions.

Medi Clinic, which raised R1.3bn via a rights offer in August this year, maintained dividend at 23c per share.

Shares in the company have gained 13% so far this year.