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Mediclinic International on Thursday announced its interim results for the six months ended 30 September 2018.
It said the first half group performance was impacted by actions taken at Hirslanden to address structural changes across the Swiss healthcare environment, while Southern Africa and Middle East operations showed local currency revenue growth and earnings before interest, tax, depreciation and amortization (EBITDA) margin improvements.
The interim dividend was maintained at 3.20 pence per share.
Over the interim period revenue was down 1% to £1 387m - up 2% in constant currency terms reflecting growth in Southern Africa and the Middle East offset by a weak performance in Switzerland.
The combined effect of tariff reductions and a less favourable insurance mix caused a greater than expected impact on Hirslanden results.
Adjusted EBITDA is down 8% to £213m - reflecting the lower contribution from Hirslanden.
Adjusted operating profit is down 15% to £137m; while reported operating profit is down 71% to £39m, impacted by non-cash Hirslanden impairment charges of £98m.
Adjusted earnings per share is down 9% to 10.3 pence.
Dr Ronnie van der Merwe, CEO of Mediclinic, said in a statement the group’s first half financial results were disappointing. The poor performance in Switzerland more than outweighed the revenue growth and margin expansion delivered by the Southern Africa and Middle East divisions.
“The rapidly implemented regulatory changes regarding outpatient tariff adjustments and outmigration of care in Switzerland are significantly impacting the healthcare market in that country," said Van der Merwe.
"We are acutely focused on adapting Hirslanden to reflect the future healthcare environment in Switzerland. Steps have been taken to improve the current financial performance through securing revenue growth, reducing costs and driving efficiency savings in different areas of the business. These, together with customary seasonal benefits, are expected to support the delivery of improved performance in the second half."
He said in the medium term, Mediclinic will improve service differentiation across the insurance categories, address the cost base, drive operational efficiencies, focus on doctor recruitment initiatives and advance Hirslanden's outpatient delivery model to capture the growing requirement for outpatient procedures in a cost-efficient manner.
In the Middle East a key milestone was achieved with the opening of the new 182-bed Mediclinic Parkview Hospital in Dubai, both on time and within budget.
"In Southern Africa, we continued to deliver excellent operational performance and made progress on our strategic priority to expand across the continuum of care, particularly in the primary care and day clinic settings," said Van der Merwe.
"We are highly cognisant of our shareholders’ experience during this period of Swiss regulatory change. Underpinned by the continued global demand for healthcare services, I am determined to improve shareholder value and confidence in Mediclinic International through our focus on delivering growth and attractive returns over the medium term."
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