Mediclinic International plc (LON:MDC) today announced its results for the year ended 31 March 2019; comparative figures are drawn from the Group’s results for the year ended 31 March 2018.
GROUP FINANCIAL RESULTS
·Revenue up 2% to GBP2 932m; up 4% in constant currency terms
·Adjusted EBITDA of GBP493m down 4%; down 2% in constant currency terms reflecting the impact of regulatory changes on Hirslanden
·Adjusted operating profit of GBP330m down 11%; reported operating profit of GBP81m (FY18: loss of GBP288m) reflects non-cash Hirslanden impairment charges and other exceptional items of GBP249m (FY18: GBP658m)
·Reported loss* of GBP151m (FY18: loss of GBP492m), reflecting a non-cash impairment charge on the equity investment in Spire of GBP164m (FY18: GBP109m) and Hirslanden impairment charges of GBP241m (FY18: GBP644m)
·Adjusted earnings per share in line with market expectations at 26.9 pence down 10%
·Cash conversion at 91% of adjusted EBITDA (FY18: 90%)
·Proposed final dividend maintained at 4.70 pence per share; total dividend for the year 7.90 pence per share
*Refers to loss attributable to equity holders
Dr Ronnie van der Merwe, Chief Executive Officer of Mediclinic International, today said:
“Adjusted Group results for the 2019 financial year were in line with market expectations despite a changing regulatory environment which led to the Group’s disappointing first half performance.
“Over the course of the last 18 months, all Swiss hospital operators have been affected by rapidly implemented regulatory changes related to outpatient tariff reductions and outmigration of care. We took actions to improve Hirslanden’s performance, including accelerated cost-saving initiatives and the introduction of operational efficiencies. As these plans started to take effect, they moderated the financial impact of the regulatory changes in the second half of the year, with Hirslanden delivering a 16% EBITDA margin for the full year, in line with guidance.
“Throughout the year we executed against our growth strategy with investments across the continuum of care in all regions, opening several day case clinics in Switzerland and Mediclinic Southern Africa. We successfully opened Mediclinic Parkview Hospital in Dubai and integrated new investments into the Group. Mediclinic’s value lies in harnessing the exceptional talent, compassion and energy of its employees and partners to ensure that our patients receive an outstanding experience in addition to cost-effective, quality care. Aligned with our Patients First strategy, we successfully implemented initiatives to enhance clinical performance and delivered improved patient experiences while maintaining cost discipline.
“Adapting our business to the changing global healthcare environment remains a priority. We have identified selective expansion and upgrade investments across the Group and will continue optimising the delivery of the services and care we provide. In Switzerland, as part of this plan, progress continues on delivering the Hirslanden 2020 strategic project.
“I am optimistic about our future and confident that we will make further progress against our strategic objectives in the next 12 months.”
GROUP STRATEGIC OVERVIEW
The strategic focus of Mediclinic and its subsidiaries is to deliver high-quality healthcare services and provide an optimal patient experience in Switzerland, Southern Africa and the Middle East. To this end, Mediclinic continued to invest in its people, clinical facilities and technology during the year. The Group’s international scale enables it to unlock further value through promoting collaboration and best practice between its divisions and to extract further synergies and cost-efficiencies across a complementary service set in the continuum of care.
There is a clear underlying long-term demand for Mediclinic’s services which is expected to remain robust, underpinned by inter alia an ageing population, the growing disease burden and technological innovation. In addition, there is an increased focus on the affordability of healthcare delivery, resulting in changing care delivery models and greater regulatory intervention, the impact of which the Group is actively working to compensate. This is in line with Mediclinic’s philosophy of making long-term decisions informed by its core business as well as the changing environment.
