Netcare's growth in patient days at its private healthcare facilities remain on track to meet the guidance for the full year of growth between 0.8% and 1.3%.
Image: Picture: Courtney Africa Independent Newspapers
Private healthcare provider Netcare's total paid patient days (PPD) are expected to increase by only 1.1% for the first six months of its 2025 financial year due to the timing of the Easter holidays, which will slow activity levels.
It's directors said in a trading update Friday that activity was influenced by the timing of Easter and school holidays. This year the holidays fall in April 2025, as compared to March 2024. As a result, activity was expected to slow down in April 2025.
Notwithstanding the seasonal factors, they said the group was on track to meet guidance, including that revenue would grow by between 5% and 6% for the financial year, while PPD was expected to increase by between 0.8% and 1.3%.
PPD for the acute hospitals was expected to increase by about 1.5% for the first half. Increased activity levels resulted in an improvement of 120 basis points in acute occupancy to 63.2%, versus 62% at the same time in 2024.
In line with sectoral trends, medical cases were growing at a faster pace than surgical cases, which were impacted by declining maternity cases and the outmigration of lower-margin surgical cases.
“Notwithstanding this trend, surgical cases still contribute more than 70% of revenue. The case mix remains more complex than before the COVID-19 pandemic. Additionally, the intensive care and high care patient days continue to outperform 2019 levels,” Netcare’s directors said.
Acute hospital revenue per PPD for the five months to February 2025 increased by 4.5%.
Demand for mental health services was robust, but the temporary unavailability of beds at certain high occupancy sites for refurbishment work had constrained capacity.
Consequently, PPD was expected to decline by about 1.9% in the first half, with occupancy levels decreasing to 67.8% from 69.3%.
Forty four doctors were granted admission rights at acute and mental health facilities to date.
The share buyback program continued and 27.8 million ordinary shares were acquired in the market from October 1, 2024 to March 27, 2025, at an average price 1 321 cents per share.
In addition, 26.2 million shares were cancelled and there are 1.23 billion shares in issue, net of treasury shares, versus 1.25 billion a year before.
“The group continues to focus on operational efficiency and strategic innovation, streamlining processes to reduce costs, and investing in technology that enhances patient care and service delivery," they said.
Some R60 million would be spent on environmental sustainability and NetcarePlus, which were key enablers of strategy. Total capital expenditure was estimated at R1.5 billion.
“The increased activity and operational efficiencies are expected to support further EBITDA (earnings before interest, tax, depreciation and amortisation) margin expansion, improved earnings and higher ROIC (return on invested apital).”
“We will continue to maintain an optimal capital structure…and the improvement in operational performance of the underlying businesses will continue to support dividend payments, where we seek to return between 50% - 70% of adjusted headline earnings to shareholders,” they said.
Additionally, further share buybacks would be considered. Netcare’s share price traded 1.89% higher at R13.45 on Friday morning, slightly up on the R11.87 it was trading at a year ago.
Business Report