CEO Danie Meintjes said Middle East offered a ‘long-term growth opportunity’, after health insurance regulations impacted on revenue growth
South Africa's largest private hospital group Mediclinic International reported a 26 percent drop in underlying half-year earnings per share (EPS) on Thursday, as its operations in the Middle East weighed on profits.
The company said earnings were largely impacted by the shares issued to acquire Abu Dhabi-based Al Noor, a firm Mediclinic bought last year. While Al Noor helped Mediclinic double its exposure to the UAE, it negatively affected its operating performance.
Mediclinic said its underlying earnings before interest, tax, depreciation and amortisation rose 11 percent to $274 million.
Revenue from Mediclinic's Swiss Hirslanden unit rose 5 percent and the South African firm said it expects modest growth and stable margins for the 2016/17 financial year.
Switzerland is the largest contributor to the group's revenue in pound terms, and turnover was further boosted by sterling's decline after Brexit, CEO Danie Meintjes said.
Meintjes said he expects continued growth in Southern Africa despite macro-economic challenges and increasing competition anticipated in the year ahead.
In the Middle East, revenue growth is expected to be at the bottom end of expectations after new health insurance regulations took effect in July, he said, adding that the region offered a “long-term growth opportunity”.