JOHANNESBURG, Oct 17 (Reuters) - South Africa’s Mediclinic International said it expects a drop in half-year earnings, sending its shares lower, as a weak performance in the United Arab Emirates weighed on its business.
The private hospital group, which has stakes in Britain’s Spire Healthcare and Switzerland’s Hirslanden, said underlying earnings per share is expected to be around 11.5 pence for the six months to end-September, from 12.8 pence a year ago.
Mediclinic, which extended its reach into the United Arab Emirates when it bought Al Noor, said revenue in its Middle East business was down 4.7 percent to 1.5 billion UAE dirham ($408.45 million).
The company’s Abu Dhabi hospitals last year lost a large number of doctors after the deal, but vacancies have since normalised, Mediclinic said, adding that its Dubai business was performing well.
“We expect to see the positive momentum in higher margin business continue to grow in the second half,” it said in a statement.
In both Switzerland and South Africa, patient volumes were lower than a year ago as the timing of the Easter holidays constrained admissions and weak economic growth in South Africa weighed.
“The management teams in both platforms have implemented the appropriate cost savings programmes and productivity initiatives that will help margins during the second half of the year,” Chief Executive Danie Meintjes said in a statement.
Mediclinic was down more than 3 percent in both London and Johannesburg, with its JSE-listed shares shedding 3.6 percent to 115.06 rand by 0812 GMT, compared with a 0.1 percent decline in the benchmark Top-40 index. ($1 = 3.6724 UAE dirham) ($1 = 13.3271 rand) (Reporting by TJ Strydom, editing by Louise Heavens)