Hospital group Mediclinic reports leap in annual profits amid Covid-19 recovery

SOUTH AFRICA – Hospital chain operator Mediclinic International has said that its profit for the first half that ended Sept. 30 more than tripled from a year earlier, inching close to pre-pandemic levels as people returned for non-COVID treatments.

However, the London-based, South African owned company did not reinstate its dividend payout, which had been suspended for a year, saying it wanted to maintain its liquidity position.

Mediclinic, with hospitals in Southern Africa, Europe and Middle East, reported a headline earnings per share – the main measure of corporate profit in South Africa – of 8.8 pence, against 2.4 pence reported for the same period a year ago.

Hospital chains across the world saw their revenues hit in the last year and a half as successive waves of COVID-19 prompted people to postpone non-essential healthcare procedures, such as surgeries or general treatments and tests, as they wanted to avoid hospital visits.

However, with an increased pace of vaccinations, notably in Europe and the Middle East, demand for hospital procedures has started to return to normal. Europe and the Middle East account for over three quarters of Mediclinic’s revenues.

“A key priority for us is to return to pre-pandemic profitability at all three divisions and we remain focused on adapting and delivering efficiencies,” said Ronnie van der Merwe, Group CEO of Mediclinic, in the statement.

The company reported a 12% jump in revenue to 1.58 billion pounds (US$2.14 billion) for the first half when compared with the corresponding period a year earlier. Revenue was more than 4% higher than in the first half that ended Sept. 30, 2019, before the pandemic, the hospital operator said.

In September, the hospital inked a deal with South Africa’s Energy Exchange as part of its commitment for carbon neutrality by 2030 and also to save on cost of operation.

The £110m (R2.2bn) deal will help the hospital to reduce their electricity consumption in what would lead to improved operational efficiency of technical installations, the introduction of various new energy-efficient and renewable technologies, and changes in employee behavior regarding energy use.

Energy Exchange is an aggregator that allows independent power generators in the country to sell renewable energy for use by industrial and commercial entities.

Mediclinic said the agreement with Energy Exchange is set to have economic benefits, and the profit jump could possibly be an early indicator, given that annual tariff increases were expected to be inflation-linked.

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