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Nov 16 (Reuters) - Mediclinic International Plc , South Africa’s largest private hospital group, reported an 11 percent drop in underlying profit in the first half of the year, hurt by weakness in its Middle East and Switzerland businesses.
The company, which owns stakes in Britain’s Spire Healthcare and Switzerland’s Hirslanden, said underlying earnings fell to 84 million pounds, or 11.3 pence per share, for the six months ended Sept. 30, from 94 million pounds, or 12.8 pence a year ago.
Mediclinic, which expanded into the United Arab Emirates with the acquisition of Al Noor in 2015, said revenue in its Middle East business fell 5 percent to 1.48 billion dirhams ($402.95 million).
The group’s total revenue rose 10 percent to 1.41 billion pounds ($1.85 billion).
The Al Noor deal helped it double its exposure to the UAE, but has been hurting its operating performance due to new health insurance regulations in the region.
A co-payment system for private healthcare in Abu Dhabi, which took effect in July 2016 and was scrapped in April this year, weighed on the firm’s operations in the UAE.
Revenue from Mediclinic’s Swiss-based Hirslanden, which accounted for 46 percent of group revenue, was flat after a decline in inpatient revenue was offset by an increase in outpatient revenue.
In Switzerland and South Africa, patient volumes were lower than a year ago as the timing of the Easter holidays constrained admissions, while weak economic growth in its home market also hurt revenues.
A decline in revenue contribution from Spire, Britain’s second-largest healthcare company in which Mediclinic owns 30 percent, also hit the results.
Mediclinic, which has been looking to take over Spire, made an offer last month that valued Spire shares at 298.6 pence each, which Spire rejected later.
“Although discussions have continued, no agreement has yet been reached on any of the key terms of an offer,” Mediclinic said in a separate statement.
$1 = 3.6729 UAE dirham $1 = 0.7610 pounds Reporting By Justin George Varghese in Bengaluru; Editing by Gopakumar Warrier