TIDMMDC
RNS Number : 5313M
Mediclinic International plc
22 January 2021
Mediclinic International plc
(Incorporated in England and Wales)
Company Number: 08338604
LSE Share Code: MDC
JSE Share Code: MEI
NSX Share Code: MEP
ISIN: GB00B8HX8Z88
LEI: 2138002S5BSBIZTD5I60
("Mediclinic" , the " Company ", or the "Group" )
22 January 2021
Q3 Trading Update
Mediclinic International plc, the diversified international
private healthcare services group, provides the following trading
update for the third quarter period between October and December
("Q3") of the financial year ending 31 March 2021 ("FY21").
Summary
-- Effectively navigating the COVID-19 pandemic; commenced
government-led COVID-19 vaccination programmes at Hirslanden
and Mediclinic Middle East facilities
-- Q3 Group revenue up 2.5%; supported by unseasonably
high inpatient activity in December 2020 at Mediclinic
Southern Africa and Mediclinic Middle East
Commenting today, Dr Ronnie van der Merwe, Group Chief Executive
Officer, said:
"Through the third quarter of our financial year, a more severe
second wave of COVID-19 cases has placed greater demand on our
acute care capacity. We continue to effectively navigate the
challenges this presents through the tireless efforts of our
medical professionals and staff who deserve our sincere
appreciation and thanks.
"Unlike early in the first wave, there have not been national
restrictions on elective procedures and outpatient activity during
Q3. Our ability during the period to continue with elective
procedures, when and where we have capacity, as well as the
unseasonable demand for our inpatient services in Southern Africa
and the UAE during December 2020 supported our Q3 financial
performance."
The information on which this update is based represents the
Group's latest financial estimates and has not been reviewed and
reported on by Mediclinic's external auditors. All financial
figures, unless explicitly stated, are adjusted(1) .
Continuing to navigate the COVID-19 pandemic
Mediclinic has been unwavering in its support of and
collaboration with the relevant health authorities in tackling the
COVID-19 pandemic ("the pandemic"). Having cared for over 30 000
COVID-19 patients, the Group is continually refining its treatment
pathways to improve clinical outcomes and has significantly reduced
the average length of stay for COVID-19 patients.
Across the world, major advances have been made in the
development, manufacture and distribution of COVID-19 vaccines.
Mediclinic is working with health authorities to support
government-led vaccination roll-out plans and prioritisation
schedules. Last week, Hirslanden opened two vaccination centres -
the first by AndreasKlinik in partnership with the Kantonsspital
Zug and the second in the canton of Thurgau. The government-led
vaccination programme in the UAE is well underway and Mediclinic
Middle East facilities are supporting the roll-out. Mediclinic
Southern Africa is supporting the National Department of Health's
vaccine roll-out strategy and is part of the private sector
initiative to assist the government where required. Governments are
prioritising healthcare workers in the vaccination roll-outs.
Mediclinic supports this approach and is facilitating the process,
ensuring eligible colleagues receive a vaccine, thereby protecting
their wellbeing and, as a result, the quality of care Mediclinic
patients receive.
During Q3, the Group continued to adapt and address the
operational challenges posed by the more severe second wave of the
pandemic. In the absence of national restrictions suspending
non-urgent elective procedures, capacity planning and the
availability of services remained the responsibility of the
divisions. As a result, in addition to the ongoing delivery of
critical and urgent care, the Group's approach to providing
elective procedures and outpatient treatments has remained fluid.
Hospitals adapt their services to reflect the changing demands
placed on individual and regional facilities and the availability
of clinical personnel as the pandemic evolves. The Group expects
the pressures and uncertainties to persist during the fourth
quarter of the financial year. On 21 January 2021, the Dubai Health
Authority implemented a four-week suspension of certain elective
and non-urgent surgical procedures.
Financial performance
Unseasonably high levels of inpatient activity at Mediclinic
Southern Africa and Mediclinic Middle East in December 2020
supported the Group financial performance in Q3. This was partially
offset by the lower patient volumes at Hirslanden due to the impact
of COVID-19 and increasing lockdown measures.
The Group continues to observe similar trends to those
experienced in the first half of the year in relation to personal
protective equipment usage and consumable supply costs.
The ongoing operational and financial resilience of the Group
was evidenced by cash and available facilities at the end of
December 2020 of around GBP660m, flat compared with the end of
September 2020. This includes an optional debt repayment at
Hirslanden of CHF50m paid during Q3 resulting in a reduction in
overall Group net debt. The Group's year-to-date ("YTD") cash
conversion (2) improved during the period to 59% (1H21: 42%),
driven by improvements at Hirslanden and Mediclinic Middle East.
The Group's cash conversion target remains at 90-100%. In the UAE,
the variable pace of payments from healthcare insurers continues,
as historically experienced in the region, with a substantial
payment recently received after the end of Q3. All covenant test
waivers remain in force. For Mediclinic Middle East, the first of
such waived covenant compliance tests is to be performed at the end
of June 2021 and for Hirslanden and Mediclinic Southern Africa
these will be performed at the end of September 2021.
Divisional summary
In Switzerland, Hirslanden's hospitals continually engage with
the Cantonal health authorities to address capacity requirements
during the pandemic. The volume of COVID-19 admissions at
Hirslanden hospitals has steadily increased throughout Q3,
exceeding the volumes during the peak of the first wave. During the
first half of January 2021, these volumes have steadily been
reducing. However, the normal operating activities at Hirslanden
have been noticeably interrupted with certain elective procedures
being postponed until increased capacity becomes available.
Mediclinic Southern Africa continues to address the challenges
presented by the more severe second wave of the pandemic which has
impacted its ability to deliver non-urgent elective care. The
second wave of COVID-19 infections is continuing and there are
significant volumes of COVID-19 patients in the Western Cape,
Kwa-Zulu-Natal, Mpumalanga, Limpopo and Gauteng. COVID-19
admissions have recently stabilised in the Garden Route and is
starting to show signs of stabilising in the Western Cape.
In the UAE, Mediclinic Welcare Hospital is the division's main
COVID-19 facility. This enabled other facilities during the period
to deliver ongoing care to predominantly non-COVID-19 patients. The
division continues to provide services to address the significant
demand for polymerase chain reaction ("PCR") testing in the UAE.
The EBITDA margin, as expected, reflects the initial start-up costs
associated with the imminent opening of the Mediclinic Airport Road
Hospital expansion and Comprehensive Cancer Centre.
Outlook
The pandemic has highlighted the global demand for quality
healthcare services and the integral role played by private
providers in supporting national governments and healthcare
authorities. Ageing populations, a growing disease burden and
digitalisation of healthcare are accelerating opportunities for
expansion and advancement across the continuum of care. Mediclinic
is also focused on several strategic projects, including virtual
care solutions, in response to the pandemic and the evolving needs
of its clients.
The uncertainty caused by the pandemic has reduced visibility on
activity levels and therefore the Group remains cautious as to the
full impact on near-term operating performance. As previously
guided, the impact of national lockdowns and restrictions on
non-urgent elective care results in the postponement of patient
treatments. When capacity becomes available, the Group is well
positioned to deliver the services and care required to address
patient demand.
The Group's FY21 trading update is currently scheduled for
mid-April 2021.
Q3 financial performance and key performance indicators
Note: All movements are approximate and for the Q3 FY21 period
relative to the prior year period.
Q3 FY21
Group (GBP)
Revenue movement 2.5%
-----------------------
EBITDA movement (8.0)%
-----------------------
Reported EBITDA margin 17.0% (Q3 FY20: 19.0%)
-----------------------
Hirslanden (CHF)
Revenue movement (1.5)%
-----------------------
EBITDA margin 16.5% (Q3 FY20: 18.9%)
-----------------------
Movement in inpatient admissions (2.5)%
-----------------------
GBP/CHF average FX rate (YTD) 1.19 (YTD Q3 FY20:
1.26)
-----------------------
Mediclinic Southern Africa (ZAR)
Revenue movement 3.5%
-----------------------
EBITDA margin 21.0% (Q3 FY20: 19.4%)
-----------------------
Movement in paid patient days (3.5)%
-----------------------
GBP/ZAR average FX rate (YTD) 21.54 (YTD Q3 FY20:
18.49)
-----------------------
Mediclinic Middle East (AED)
Revenue movement 8.0%
-----------------------
EBITDA margin 13.5% (Q3 FY20: 18.3%)
-----------------------
Movement in inpatient admissions
and day cases 1.0%
-----------------------
Movement in outpatient cases (10.0)%
-----------------------
GBP/AED average FX rate (YTD) 4.71 (YTD Q3 FY20:
4.66)
-----------------------
(1) The Group uses adjusted income statement reporting as
non-IFRS measures in evaluating performance and as a method to
provide shareholders with clear and consistent reporting. The
Group's non-IFRS measures are intended to remove from reported
earnings volatility associated with defined one-off incomes and
charges which were previously referred to as underlying.
(2) Measures conversion of adjusted EBITDA into cash generated
from operations.
Cautionary Statement
This announcement contains certain forward-looking statements
relating to the business of the Company and its subsidiaries,
including with respect to the progress, timing and completion of
the Group's development; the Group's ability to treat, attract and
retain patients and clients; its ability to engage consultants and
general practitioners and to operate its business and increase
referrals; the integration of prior acquisitions; the Group's
estimates for future performance and its estimates regarding
anticipated operating results; future revenue; capital
requirements; shareholder structure; and financing. In addition,
even if the Group's actual results or development are consistent
with the forward-looking statements contained in this announcement,
those results or developments may not be indicative of the Group's
results or developments in the future. In some cases,
forward-looking statements can be identified by words such as
"could", "should", "may", "expects", "aims", "targets",
"anticipates", "believes", "intends", "estimates", or similar.
These forward-looking statements are based largely on the Group's
current expectations as of the date of this announcement and are
subject to a number of known and unknown risks and uncertainties
and other factors that may cause actual results, performance or
achievements to be materially different from any future results,
performance or achievement expressed or implied by these
forward-looking statements. In particular, the Group's expectations
could be affected by, among other things, uncertainties involved in
the integration of acquisitions or new developments; changes in
legislation or the regulatory regime governing healthcare in
Switzerland, South Africa, Namibia and the UAE; poor performance by
healthcare practitioners who practise at its facilities; unexpected
regulatory actions or suspensions; competition in general; the
impact of global economic changes; and the Group's ability to
obtain or maintain accreditation or approval for its facilities or
service lines. In light of these risks and uncertainties, there can
be no assurance that the forward-looking statements made in this
announcement will in fact be realised and no representation or
warranty is given as to the completeness or accuracy of the
forward-looking statements contained in this announcement.
The Group is providing the information in this announcement as
of this date, and disclaims any intention to, and make no
undertaking to, publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
About Mediclinic International plc
Mediclinic is a diversified international private healthcare
services group, established in South Africa in 1983, with divisions
in Switzerland, Southern Africa (South Africa and Namibia) and the
UAE.
The Group's core purpose is to enhance the quality of life.
Its vision is to be the partner of choice that people trust for
all their healthcare needs.
Mediclinic is focused on providing specialist-orientated,
multi-disciplinary services across the continuum of care in such a
way that the Group will be regarded as the most respected and
trusted provider of healthcare services by patients, medical
practitioners, funders and regulators of healthcare in each of its
markets.
At 30 September 2020, Mediclinic comprised 76 hospitals, eight
sub-acute and specialised hospitals, 17 day case clinics and 18
outpatient clinics. Hirslanden operated 17 hospitals and four day
case clinics in Switzerland with more than 1 800 inpatient beds;
Mediclinic Southern Africa operations included 52 hospitals (three
of which in Namibia), eight sub-acute and specialised hospitals and
11 day case clinics (four of which operated by Intercare) across
South Africa, and more than 8 700 inpatient beds; and Mediclinic
Middle East operated seven hospitals, two day case clinics and 18
outpatient clinics with more than 900 inpatient beds in the UAE. In
addition, under management contracts, Mediclinic Middle East
operates one hospital in Abu Dhabi and will open a 200-bed hospital
in the Kingdom of Saudi Arabia in mid-2022.
The divisions' contributions to Group revenue for the financial
year ended 31 March 2020 were 47% by Hirslanden, 29% by Mediclinic
Southern Africa and 24% by Mediclinic Middle East.
The Company's primary listing is on the London Stock Exchange
("LSE") in the United Kingdom, with secondary listings on the JSE
in South Africa and the Namibian Stock Exchange in Namibia.
Mediclinic also holds a 29.9% interest in Spire Healthcare Group
plc, a leading private healthcare group based in the United Kingdom
and listed on the LSE.
For further information, please contact:
Investor Relations, Mediclinic International plc
James Arnold, Head of Investor Relations
ir@mediclinic.com
+44 (0)20 3786 8181
Media queries
FTI Consulting
Ben Atwell/Ciara Martin - UK
+44 (0)20 3727 1000
Sherryn Schooling - South Africa
+27 (0)21 487 9000
Registered address : 6(th) Floor, 65 Gresham Street, London,
EC2V 7NQ, United Kingdom
Website: www.mediclinic.com
Corporate broker : Morgan Stanley & Co International plc and
UBS Investment Bank
JSE sponsor (South Africa): Rand Merchant Bank (A division of
FirstRand Bank Ltd)
NSX sponsor (Namibia): Simonis Storm Securities (Pty)
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