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Mediclinic shares tank as H1 profits drop

Oct 17 2018 13:14
Fin24

(Mediclinic website)

Mediclinic International's share price took a beating on Wednesday afternoon after the group warned shareholders that profits would likely be lower than expected.

By noon on Wednesday, Mediclinic shares were changing hands at R72.10, down 19%.

In an interim trade update issued on Wednesday morning, ahead of the financial results for the half year ended September 30, the group had announced that H1 adjusted EBITDA was down around 4%, and adjusted EBITDA was down around 8%.

Adjusted earnings per share were expected to be around 10 pence, down from 11.3 pence in the previous period, Mediclinic said.

Trading in the first half of the year experienced "customary seasonality" in Switzerland and the Middle East, the group said, though there was a gradual improvement in revenue and margin expansion ahead of stronger growth expected in the second half of the year.

"In Switzerland, the business continues to adapt to recent regulatory changes in the outpatient environment, which in the period had a greater than expected impact on admissions and the insurance mix," the statement said.

In Southern Africa, Mediclinic added, there was weakness in the second quarter due to fewer pneumonia and bronchitis cases in the winter.

CEO Dr Ronnie van der Merwe said the group had delivered on "a number of key operational initiatives" despite the weaker than expected performance.

These included the 182-bed Mediclinic Parkview Hospital in Dubai and completed the investment in the Intercare day clinic business and Welkom Medical Centre in SA.

"For the full year, our performance in Southern Africa remains in line with guidance," he said.

"In the Middle East, full year EBITDA delivery remains on track with revenue growth lower than previously expected. In Switzerland, we now expect to deliver modest revenue growth in the full year including contribution from Clinique des Grangettes, with an adjusted EBITDA margin of around 16%."

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