Mediclinic still positive about Middle East operations | Fin24
 
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Mediclinic still positive about Middle East operations

Oct 18 2017 16:25
Lameez Omarjee
Mediclinic

Mediclinic. (Supplied)

Company Data

MEDICLINIC INTERNATIONAL PLC [JSE:MEI]

Last traded 57
Change 0
% Change 0
Cumulative volume 217004
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg – Mediclinic [JSE:MEI] is still optimistic about its operations in the Middle East, despite a drop in revenue over the period.

According to a trading update issued by the private hospital group on Tuesday, the 4.7% decline in revenue of the Middle East business to 1.5bn dirham (R5.49bn) was in line with its expectations. The trading statement is issued ahead of the audited interim financial results to be released in November.

Overall group revenue levels, at constant currency, remained flat, and earnings before interest, taxation, depreciation and amortisation (Ebitda) was down 5%. But considering foreign currency movements revenue was up 9.5% and to £1.4bn (R24.78bn) and Ebitda was up 5%.

Operations in Southern Africa and Switzerland saw patient volumes come down. Cost savings programmes and productivity initiatives have since been implemented to help margins for the second half of the financial year, the group said.

Mediclinic Southern Africa revenue was up 4.1% to R7.6bn, despite a weak macro-economic environment. Revenue growth for the full year is expected to be around 4%, the update read. Further, Mediclinic expects Ebitda to be around 21%, driven by cost-management and other efficiencies.

Mediclinic Southern Africa operates 49 hospitals and two day clinics throughout South Africa and three hospitals in Namibia. This amounts to more than 8 000 inpatient beds.

In Southern Africa, Mediclinic has invested in the Intercare group, which focuses on primary and sub-acute care.

Middle East

CEO Danie Meintjes said that the Middle East had started the financial year well, following operational and regulatory changes in Abu Dhabi.

“I am pleased that the investments made in our clinical services, personnel and facilities are driving the turnaround in Abu Dhabi,” he said. Considering the sale of non-core assets, revenue was effectively down 0.6%.

Particularly the Dubai operations are performing strongly due to growing patient numbers at the Mediclinic City Hospital’s new North Wing. Meintjies said that strong and comparative revenue growth is expected in the second half of the year.

The group said that actions taken are having a positive effect on the business and are laying the foundation for sustainable growth. “Doctor vacancies have normalised and the focus has shifted to supporting doctors to grow their patient activity.”

There has also been an improvement in patient activity in Abu Dhabi after a co-payment requirement (known as Thiqa) for health insurance was removed in April 2017.

“The removal of the Thiqa co- payment has enabled the business to accelerate its strategy of shifting activity away from Basic, towards Enhanced and Thiqa patients thereby improving the quality of revenue.”

Mediclinic Middle East operates six hospitals and 23 clinics with more than 700 inpatient beds in the United Arab Emirates.

Mediclinic has invested in two main Abu Dhabi hospitals, these being the Mediclinic Airport Road Hospital and Mediclinic Al Noor Hospital, previously known as Khalifa Street Hospital. Mediclinic Parkview Hospital in Dubai is on track for completion by the fourth quarter of the next financial year.

The Western Region Hospital project planning is underway.

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