Netcare shares rise as first quarter earnings surge
Business Report

Netcare shares rise as first quarter earnings surge

Netcare shares rise as first quarter earnings surge

By Sandile Mchunu Time of article published 3m ago

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DURBAN – NETCARE’S share price rose more than 7 percent on the JSE on Friday in intraday trade boosted by an improved performance for the first quarter to end December, even though it continued to feel the impact of the Covid-19 outbreak in its operations.

The share price later closed at 8.55 percent.

The private healthcare provider reported a 9.1 percent increase in revenue and its earnings before interest, tax, depreciation and amortisation (Ebitda) surged by 78.3 percent during the quarter compared to the quarter to end September 2020.

However, the group said the Covid-19 pandemic had adversely impacted year-on-year performance with group revenue down by 4.6 percent, due to lower activity levels related to Covid19

and Ebitda declined by 29.4 percent for the first quarter when compared to the same quarter last year.

Its operating profit fell by 39.8 percent, with Ebitda margin declining to 15.1 percent, due to the loss of activity, as a result of negative operating leverage and additional costs related to the pandemic.

“Netcare’s operations continue to be affected by the Covid-19 pandemic.

“In line with global trends, the emergence of a more contagious variant of the virus, coupled with the relaxation of lockdown measures, resulted in a more severe second wave of infections.

“This is evidenced by the number of Covid-19 patients admitted during the first quarter of the 2021 financial year exceeding the total admissions over the seven month period from the incidence of the first Covid-19 case in early March through to September,” the group said.

It had cash resources and committed undrawn facilities of R5.2 billion at the end of the quarter.

Netcare has treated 45 600 Covid-19 patients of which 27 363 were admitted to their hospitals with 25 percent of those admitted treated in high care or intensive care since the emergence of the virus.

The group said its regional Covid-19 patient admissions had mirrored the higher national incidence of Covid-19 related cases and bed capacity continued eto be managed on a risk-stratified basis.

“During the peak of the second wave approximately 60 percent of total beds were allocated to Covid-19 patients compared to approximately 80 percent during the peak of the first wave in July,” the group said.

Its total patient days increased by 9.9 percent in the quarter compared to the quarter to end September, and this represented a growth of 9.3 percent within acute hospitals and an increase of 15.9 percent in mental health facilities.

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