‘Excellent’ six months for SA hospitals – Life Healthcare

Hospital bed. (Duncan Alfreds, Fin24)
Hospital bed. (Duncan Alfreds, Fin24)

Life Healthcare [JSE: LHC]  released a trading update for the year to end-September, which showed a reversal in the decline in Southern African patient days in the first half of the year.

The company owns 66 hospitals and clinics in Southern Africa and also has a diagnostic imaging (MRI and CT scans) business in Europe, and a private healthcare company in Poland.

Its revenue is expected to be up by between 7.9% and 10.3% for the year, with revenue from South Africa increasing between 6.1% to 7.9%. Normalised earnings before interest, tax, depreciation and amortisation (Ebitda) rose 0.4% to 5.4%.

Revenue per paid patient day (PPD)  increased by around 5.9%, and the southern Africa business had an “excellent” second half of the year, with per paid patient days growing by  around 1.8%, after shrinking by 0.3% in the first half, the group said.

Its profit margin has declined as it invested in growth initiatives and due to operational challenges with the delivery of radio-isotopes in the UK which increased costs.

Its international revenue grew by between 10.0% and 13.2% thanks to strong growth in PET-CT (Positron Emission Tomography – Computed Tomography) scan volumes in the UK, the impact of the acquisition of Italian diagnostic imaging clinics during the second half of the year, an acquisition of scanning facilities in the UK and a solid underlying performance in Ireland. The 4.2% depreciation of the rand against the pound over the year also contributed to the revenue growth.

By late morning, its share price was down 1.7% to R24.23.

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