Business Maverick


Life Healthcare, Netcare and Mediclinic post healthy results to end-March 2022

Life Healthcare, Netcare and Mediclinic post healthy results to end-March 2022

All three of SA’s major hospital groups — Life Healthcare, Netcare and Mediclinic — reported increased demand for healthcare services over the past year, following the caution patients had shown during the previous two Covid years.

Life Healthcare’s trading performance for the six months to the end of March reflected a strong performance in southern Africa and a good underlying business performance in Alliance Medical Group (AMG).

Group revenue from continuing operations increased by 4.2% to R13.5-billion, consisting of a 4.5% increase in southern African revenue to R9.5-billion, a 1.8% increase in international revenue to R3.8-billion and a R232-million revenue contribution from growth initiatives. 

Earnings per share from continuing operations decreased by 16.8% to 41.5 cents, largely due to the disposal of Scanmed and the end of the Covid-related support services AMG had provided in the UK and Italy during the previous year. 

Group chief executive Peter Wharton-Hood said paid patient days were up by 2.1% in the southern Africa region. 

“We have a substantial core acute business in southern Africa including 8,256 hospital beds, five oncology centres and 66 healthcare facilities. Internationally, the Life Healthcare group provides imaging services to governments across the United Kingdom, Ireland and Italy, boasting 150 MRI scanners, 55 PET-CT scanners, and 11 radiopharmacy cyclotron sites,” he said. 

Fierce contestation expected for ANC deputy president position

Adam Pyle, the chief executive of Life Healthcare Southern Africa, noted that the fourth wave of Covid-19 led to a fundamental change in hospital patterns, with paid patient days substantially down. 

“It’s good to see that 89% of our employees are vaccinated. The number of ventilator days decreased dramatically in wave four and [there was] a further decrease in wave five, which is pleasing to see,” he said. 

However, he notes that in wave five, a different picture is starting to emerge from 22 April, where paid patient days are up 6% from wave three, driven by a 12% increase in surgical paid patient days. 

“We expect occupancy rates of around 66.5% in May. Overall, we had a 15% increase in non-Covid paid patient days,” he says.  

Ronnie van der Merwe, the group chief executive officer of Mediclinic, said in the year to end-March 2022, the fundamental demand for healthcare services drove 750,000 inpatient and day-case admissions, with outpatient revenue increasing by 10%. Encouragingly, revenue and earnings exceeded pre-pandemic levels in all three divisions. 

Mediclinic took on 43,000 Covid-19 inpatients this year, up from 42,000 in the previous year. Van der Merwe said the group’s four priorities were to effectively deal with the pandemic, progress towards pre-pandemic profitability, execute group strategy and improve group value.  

Mediclinic’s on-site vaccination centres in South Africa assisted with the delivery of 360,000 vaccines, while more than one million vaccine doses were administered at Mediclinic’s Switzerland vaccination centres. 

The Omicron variant proved less clinically severe than previous variants, resulting in fewer Covid-19 inpatient admissions than in previous waves; however, staffing and patient scheduling were severely disrupted at times by the variant’s higher transmissibility. 

Mediclinic’s group revenue was up by 8% at £3,233-million, signalling progress towards pre-pandemic profitability, while reported operating profit was up by 34% from £209-million to £280-million. Cash and cash equivalents increased during the year to £534-million.  

The pandemic played a greater role than just pushing up patient numbers, with an increased emphasis on digitisation, and Mediclinic has invested heavily in its information and communications technology (ICT), electronic health records and digital initiatives. 

A collaboration with healthcare provider Mehiläinen will see the group providing digital healthcare solutions for clients and healthcare professionals on the BeeHealthy platform. To this end, Mediclinic has already launched client-facing applications in all three geographies (southern Africa, Switzerland and the Middle East), piloting various digital patient pathways. 

Van der Merwe says the group’s virtual care initiative digitises existing services to create a real-time healthcare system including telehealth services, remote patient monitoring and virtual critical care unit solutions. 

In Switzerland, Hirslanden, along with Medbase and the insurance partners Groupe Mutuel, Helsana and the Swica group launched a joint digital ecosystem called Compassana, which will allow Swiss clients to coordinate their care. The group opened its fifth day-case clinic in Bern and is piloting an innovative insurance product in the same region, in collaboration with Medbase and Helsana Insurance. 

In southern Africa, Mediclinic expanded with day clinics and renal care facilities, opening two new day-case clinics to make up a total complement of 14. The hospital group’s first renal facility was opened in 2021, with three more renal facilities opened in the year to end-March 2022. In July 2021, Mediclinic partnered with Icon Oncology to open a flagship R45-million oncology centre in Constantiaberg, Cape Town where cancer patients will be able to access surgeons, oncologists, radiologists, pathologists and other specialists. 

Expansion in the Middle East took the form of a 100-bed expansion and an integrated oncology unit at Airport Road Hospital in Abu Dhabi. In November 2021, Mediclinic acquired the remaining 70% shares in the Bourn Hall Fertility Centre and also launched a Mediclinic Perform sports medicine and rehabilitation centre in Dubai. Van der Merwe says he anticipates that Mediclinic will open a 236-bed private hospital in Saudi Arabia in 2023, with the Al Murjan group.  

Netcare’s normalised operating profit grew by 14% to just more than R1-billion as improved activity levels and cost efficiencies translated into strong operating leverage. Profit after tax and exceptional items increased by 19.5% to R448-million. 

Netcare’s chief executive officer, Dr Richard Friedland, says the strong operating leverage achieved in the first half of 2022 is encouraging. Netcare opened a 427-bed hospital in Alberton in April 2022, which is already reporting good occupancy levels, while the new 36-bed Netcare Akeso Richards Bay mental health facility opened earlier this month. 

Patient shareholders who stuck with their hospital stocks over the past few years were rewarded when Mediclinic issued a final dividend of 3 pence a share after not declaring any dividend last year. Netcare declared an interim dividend of 2o cents per share. Life Healthcare approved an interim gross cash dividend of 15 cents per ordinary share for the six months to end-March. DM/BM


[hearken id=”daily-maverick/9562″]


Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted

Daily Maverick Elections Toolbox

Download the Daily Maverick Elections Toolbox.

+ Your election day questions answered
+ What's different this election
+ Test yourself! Take the quiz