Life Healthcare takes a knock as coronavirus impacts surgeries, admissions

The coronavirus pandemic started taking a noticeable toll on
private healthcare group Life Healthcare in February this year, affecting the
group’s interim results for the six months to end March 2020, it said in a
notice to shareholders on Monday.

Life Healthcare – which owns hospitals in Southern Africa,
as well as an MRI/CT scan and healthcare company in Europe – saw a revenue increase
of 6.8{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} to R13.2 billion, while normalised earnings per share increased by 12{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}
to 55.0 cents. Normalised EBITDA (earnings before interest, tax, depreciation
and amortisation) before a new accounting standard was implemented went up 2.7{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}
to R2.8.

The group acknowledged, however, that the Covid-19 outbreak
had begun to bite.

“The estimated impact of the pandemic for the period to
31 March 2020 is lower revenue of R264 million, a decrease in normalised EBITDA
of R166 million, and earnings have been negatively impacted by R132 million,”
it said.

It also cited a “strong financial position” with available
undrawn facilities of R3.8 billion. However, no dividend was declared.

South African operations

“The estimated impact on EBITDA was R67 million for the period to 31 March
2020, and slight losses were made in April as the revenues were less than R1
billion and fixed costs are R1.1 billion,” commented Ndebele.

“Subsequent to SA moving from lockdown Level 5 to Level
4, enabling the return of medically necessary surgery and other admissions
which had been postponed, volumes are picking up gradually. Volumes in the
first week of May were up 14{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2} relative to the weekly average of April
2020.”

Revenue growth at radiology company Alliance Medical was
7.4{e93887a69cdd95d753f466db084bbc3aa0067124675315461d28d68a72842cc2}, driven by growth in PET-CT scans in the UK, acquisitions and a weaker
rand.