MDC.L Share News (MDC)

(Sharecast News) - Private healthcare services provider Mediclinic International updated the market on its trading for the half-year ended 30 September on Wednesday.

The FTSE 250 firm said its Hirslanden division had continued to make "good progress" in adapting the business to the regulatory changes affecting the Swiss healthcare system.

Performance during the first six months of the financial year there was said to be in line with expectations, and incorporated the impact of identified clinical treatments transferring from an inpatient to a lower outpatient tariff.

That process had gradually occurred across Swiss cantons over the past two years, with official national implementation effective from 1 January this year.

In response, Hirslanden had initiated a new day case surgery strategy, which focussed on a lower cost and more efficient service delivery model.

It had also continued to attract additional clinical professionals;, delivered ongoing cost management and efficiency savings, and advanced the Hirslanden 2020 strategic project, the Mediclinic board said.

Hirslanden delivered first half growth of around 5.0% in both revenue and inpatient admissions, benefiting from the contribution of Clinique des Grangettes.

Revenue per admission was down 2.2%, while the general insurance patient mix was 49.2%.

The revenue contribution in the first half from the Clinique des Grangettes acquisition was around CHF 55m, and the hospital contributed 5.5% growth in Hirslanden inpatient admissions during the period.

On an IFRS16 accounting basis, the EBITDA margin at Hirslanden was around 16.0%, while the pre-IFRS16 EBITDA margin for the first half was broadly stable, at around 14.0%.

At Mediclinic Southern Africa, the company said first half revenue was up around 7.0%, with an increase in inpatient bed days sold of 2.7%, in line with expectations.

The revenue contribution in the first half from the majority investment in the Intercare group, consisting of four day case clinics, four sub-acute hospitals and one specialist hospital, effective since 1 December last year, was around ZAR105m.

As the board had expected, Intercare accounted for the majority of growth in the division's inpatient bed days sold during the period at 2.4%.

On an IFRS16 accounting basis, the EBITDA margin at Mediclinic Southern Africa was around 21.0%.

The pre-IFRS16 EBITDA margin for the first half was in line with expectations, at around 20.0%.

At Mediclinic Middle East, the company said revenue growth was driven by the continued ramp-up of Mediclinic Parkview Hospital in Dubai and a gradual improvement in the Abu Dhabi business with Mediclinic Airport Road Hospital, delivering a "strong" performance.

Mediclinic Parkview Hospital was continuing to outperform expectations since opening 12 months ago, the board said, although the region was continuing to experience a weaker macroeconomic environment and a sustained competitive landscape.

Mediclinic Middle East first half revenue growth was around 8.5%, with inpatient and outpatient volumes in the division ahead 9.0% and 5.5% respectively.

During the seasonally-quieter first half of the year, on an IFRS16 accounting basis, the EBITDA margin in Mediclinic Middle East was around 12.5%.

The pre-IFRS16 EBITDA margin for the first half was in line with expectations, at around 9.5%.

Looking at Spire Healthcare Group, in which Mediclinic holds a 29.9% investment, its reported performance for its half-year financial period ended 30 June was in line with expectations.

Guidance for its financial year ending 31 December remained unchanged, the Mediclinic board added.

It said the investment in Spire was equity accounted, recognising the reported IFRS16 profit of £7.1m for Spire's financial half-year ended 30 June.

Mediclinic's first half equity accounted share of profit from Spire amounted to £2.1m.

Looking at the finances at the Group level, in constant currency, Mediclinic reported a "solid" first half performance, with revenue up around 6.5% and pre-IFRS16 EBITDA ahead around 3.5%.

On a reported basis, first half revenue was up around 9.0% and pre-IFRS16 EBITDA was 5.0% higher, with the IFRS16 EBITDA margin around 16.5%.

"I am encouraged by the first-half performance of the group with trading in line with expectations," said chief executive officer Dr Ronnie van der Merwe.

"At all three divisions, our core acute care business is being supplemented by our continued expansion across the continuum of care.

"In Switzerland, Hirslanden delivered good revenue growth and a broadly stable EBITDA margin."

At Mediclinic Southern Africa, van der Merwe noted that patient volumes were in line with expectations, and the company continued to invest in initiatives to further enhance its clinical standards.

"At Mediclinic Middle East, there was a continued focus on efficiencies in operational delivery.

"Contributing to the division's growth was the strong performance at the new Mediclinic Parkview Hospital in Dubai and the continued gradual improvement in the Abu Dhabi business where Mediclinic Airport Road Hospital delivered good growth."