Johannesburg: Mediclinic International Plc, the combination of the biggest private health-care providers in South Africa and Abu Dhabi, fell the most in almost a month on concerns of a slow recovery in the UAE and weaker patient growth in Switzerland.
In the Middle East, revenue fell 8 per cent in the year through March, the hospital operator said in a statement on Wednesday. Trading in the region was hurt by the departure of about 157 Abu Dhabi doctors ahead of last year’s merger with Al Noor Hospitals and regulatory changes such as a required upfront payment for some patients. Total sales rose 15 per cent, excluding currency moves.
“It will take time for the UAE business to recover,” Deutsche Bank analysts Marc Hammoud and Letlotlo Lenake wrote in a note, while cutting their recommendation on the stock to hold from buy. “Intensifying competitive landscapes in South Africa and Switzerland make for a challenging operating environment,” they said.
Shares of Mediclinic, which also owns almost 30 per cent of Spire Healthcare Group Plc in the UK, fell 3.7 per cent to 836.50 pence as of 10.13am in London, paring the gain this year to 8.5 per cent. That’s the steepest fall since April 28.
Mediclinic reported a decline in both the number of bed days sold and the average length of stay at its Swiss business, which accounts for almost half the company’s revenue. In Southern Africa, which generates 28 per cent of sales, Mediclinic reported marginal increases by both those measures. South African rival Netcare Ltd. last week reported a 1 per cent decline in patient days sold.
Mediclinic maintained the full-year dividend at 7.9 pence a share.
The outlook “points to challenging conditions across its platforms, while a gradual recovery in the UAE over time may disappoint those who may have expected a stronger” rebound, UBS analyst Kane Slutzkin wrote in a note.
