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Johannesburg - Hospital group Netcare on Monday reported basic headline earnings per share up 41% to 33.3c for the six months ended March from 23.1c before.
The interim capital reduction was up 14% to 16c per share.
Revenue was 12% higher at R11.619bn, while operating profit grew 15% to R1.822bn.
The group said the global economic downturn continues to affect the business climate and the group's operating environment remains challenging, particularly the UK.
The group said it was pleased with its "solid overall performance with operating regions either meeting or exceeding management guidance provided in November 2008."
Group revenue rose 12.3%, supported by strong demand for private healthcare services in South Africa, solid core activity in the UK and the inclusion of hospitals acquired from Nuffield for the full six months.
In South Africa, strong patient volumes and improved hospital margins were tempered by underwriting costs and higher doubtful debt provisions in the Primary Care division. In the UK, efficiency improvements and cost savings resulted in improved operating profit margins.
The group results were positively impacted by the sale of Netcare's 50% interest in Ampath Holdings Trust (Ampath) following Competition Commission approval of the transaction on February 24 2009. The sale realised gross proceeds of R1.027bn. The profit from the disposal amounted to R588m, after capital gains tax of R90m, which is included in profit from discontinued operations.
Group net financial expenses were 5.7% higher at R1.252bn, mainly due to the acquisition of the Nuffield hospitals, which were financed by raising additional debt of R1.21bn in February 2008.
The group said it remains difficult to predict the impact of various factors on the group in the current volatile global economic environment. However, as the half- year results show, the demand for healthcare does not necessarily abate in an economic downturn.
Netcare remains confident that the demand for private healthcare will be sustained in SA, supported by a financially sound and growing medical scheme market. It is hopeful that the positive approach by government, as outlined in the Strategic Plan announced by the Department of Health, will result in greater collaboration between the private and public sectors.
In the UK, the recessionary environment is expected to continue to impact out-of-pocket spending on private healthcare. However, we expect this to be largely offset by growth in NHS activity through the purchasing of healthcare services by NHS Primary Care Trusts, it said.
- I-Net Bridge
