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Mediclinic First-Half Profit Gains on Debt Refinancing

Nov. 6 (Bloomberg) -- Mediclinic International Ltd., South Africa’s largest private-hospital owner, said first-half profit increased 66 percent as it gained from a debt refinancing and a buy-out of minority partners in its Middle East unit.

Net income advanced to 1.4 billion rand ($136.8 million), from 843 million rand a year earlier, the Stellenbosch-based company said in a statement today. Finance costs fell to 610 million rand from 820 million rand a year earlier.

Mediclinic refinanced 28 billion rand of debt in South Africa and Switzerland due October 2014 last year, saving 550 million rand in annual interest charges, and raised 5 billion rand in a rights offer. Part of the proceeds were used to buy shares it didn’t already own in Emirates Healthcare Holdings Ltd. to take advantage of growth in the Middle East.

“The refinancing has saved us on interest rate costs in Switzerland and has lowered our Swiss tax rate,” Chief Financial Officer Craig Tingle said in a phone interview.

A weaker rand against the Swiss franc and United Arab Emirates dirham also had a “significant positive effect” on results, he said.

While investing in existing platforms provides Mediclinic with its most favorable returns, the opening of its first Abu Dhabi clinic in February 2014 will give the company a “toe in the water” in that region, Chief Executive Officer Danie Meintjes said in a phone interview. The company may also consider expansion into dedicated psychiatric units in South Africa, he said.

Mediclinic shares, which have gained 35 percent this year, declined 0.8 percent to 74 rand at the close of trading in Johannesburg. Netcare Ltd. has risen 26 percent this year and Life Healthcare Group Holdings Ltd. has increased 19 percent.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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