Netcare Profit Gains as More Hospital Beds Added in South Africaby
Local demand for private healthcare services is strong
Earnings beat analyst estimates; raises full-year dividend
Netcare Ltd. said full-year earnings rose 5.6 percent after South Africa’s second-biggest private-hospital operator added more beds in its home market and attracted a higher number of patients in the U.K.
Adjusted earnings per share excluding one-time items were 199.5 rand cents in the year through September, Johannesburg-based Netcare said in a statement on Monday. That beat the 194 cents average estimate of 12 analysts polled by Bloomberg. Revenue advanced 12 percent and the final dividend was raised 5.6 percent to 57 cents a share.
“Netcare experienced strong demand for its private health-care services, despite low economic growth and a decline in total medical scheme beneficiaries,” the company said.
The hospital operator is benefiting from increasing demand for private health care in South Africa as higher earners switch from state-owned providers. The company added 92 new beds in its home market during the period, after increasing the bed count by 584 the previous year. In the U.K., Netcare’s BMI private hospital unit benefited from spillover from an increased caseload at the state-owned National Health Service, while the company said there’s yet to be any impact from Britain’s vote to leave the European Union in June.
The shares rose 2.5 percent to 34.86 rand as of 9:18 a.m. in Johannesburg, valuing the company at 51 billion rand ($3.5 billion). That stock has also gained 2.5 percent this year.
Larger competitor Mediclinic International Ltd. has dropped 5.3 percent in London in 2016 while Life Healthcare Group Holdings Ltd., which last week followed its two larger competitors into the U.K. when it agreed to buy diagnostics specialist Alliance Medical Group Ltd., has declined 8.4 percent in Johannesburg.