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Mediclinic News : MEDICLINIC FALLS AFTER IMPAIRING SWISS OPERATION

Title

MEDICLINIC FALLS AFTER IMPAIRING SWISS OPERATION

Date

2018-11-16

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News Description

INCECONNECT The private hospitals group says regulatory changes are significantly impacting the healthcare market in Switzerland and all operators are affected. Mediclinic has slumped into a loss after it wrote down the value of its investment in Switzerland's Hirslanden by £98 million and took a non-cash impairment on Spire Healthcare in the UK. Following a recovery in the United Arab Emirates, the private hospitals group now faces issues in Switzerland due to regulatory changes which have impacted all healthcare providers. It said the combined effects of tariff reductions and a less favourable insurance mix had a big than expected impact on results from Hirslanden. Mediclinic reported a 1% decline in revenue to £1.39 billion for the six months to end-September in constant currency terms as growth in Southern Africa and the Middle East was offset by a weaker performance in Switzerland. Hirslanden also weighed on earnings before interest, tax, depreciation and amortisation (EBITDA), which fell 8% to £213 million. Operating profit fell 71% to £39 million after the Hirslanden impairment and was down 15% on an adjusted basis at £137 million. It reported a loss of £168 million, reflecting a non-cash impairment charge on its equity investment in Spire. Adjusted earnings per share fell 9% to 10.3p. It's maintained its interim dividend at 3.2p. The rapidly implemented regulatory changes regarding outpatient tariff adjustments and outmigration of care in Switzerland are significantly impacting the healthcare market in that country," CEO Dr Ronnie van der Merwe said. "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." Mediclinic said Hirslanden was likely to report moment revenue growth for the full year, while growth in Southern Africa would be driven by an expected increase in bed days sold of between 1% and 2%. In the Middle East, it expects revenue growth in the high single digits as additional bed capacity comes online. Its shares fell 5.2% to R6319 yesterday.
Created at 2018/12/05 09:14 AM by Mediclinic
Last modified at 2018/12/05 09:14 AM by Mediclinic