Life Healthcare has reported higher earnings at the halfway stage and expects continued activity growth in its southern African operations.
Headline earnings per share (HEPS) from continuing operations were up 29.9% at 47c. An interim dividend of 19c per share was declared, up 11.8% from a year earlier.
Total HEPS from continuing and discontinued operations increased by 63% to 65.2c.
Revenue from continuing operations was 7.8% higher at R11.7bn driven by robust activity growth in Southern Africa and strong growth in NeuraCeq doses sold, the company said in a statement on Wednesday.
Profit after tax from continuing operations increased to R735m from R600m before.
The group concluded the disposal of AMG at the end of January; it has been disclosed as a discontinued operation and is not included in the results of the continuing operations for the first half.
Life received R10.2bn in net cash proceeds from the disposal after the settlement of all offshore debt and transaction costs. The special dividend of R8.8bn was paid on April 8.
After the reimbursement approval of a disease-modifying drug in the US in October 2023, doses sold of NeuraCeq grew 74.4%, contributing to revenue growth in Life Molecular Imaging of 77.5%.
The group’s Southern African operations experienced strong demand for their services, which led to higher utilisation of the group’s hospitals and complementary services, with paid patient day (PPD) growth of 2.3%.
Revenue for Southern Africa grew by 5.9%. The normalised earnings before interest, tax, depreciation and amortisation (ebitda) margin was affected by lower-than-expected occupancies in the first quarter, increased costs associated with running the business and a negative case mix towards more medical cases at a lower revenue per PPD when compared with surgical cases.
The case mix is partly temporary due to the timing of the Easter holidays, which resulted in less theatre activity.
As part of its portfolio optimisation, Life closed two facilities during the previous period — a small maternity facility in Gauteng and an acute rehabilitation facility in Bloemfontein.
Its full-year results were expected to show an increase of more than 20% on continued activity growth in its Southern African operations, driven by growth in volumes from network deals and through the impact of acquisitions concluded in the past 12 months, it said.
Its acute hospitals delivered strong revenue growth in the current period, with PPDs growing by 2.7%, benefiting from the new network deals that started in January 2023. The robust PPD growth translated into higher occupancy across its acute hospital facilities, with a weighted average occupancy of 66.6% compared with 65.5% in the previous period.
Acute hospital revenue grew 5.5% year-on-year after being positively affected by the robust PPD volume growth.
The group’s complementary services reported revenue growth of 7.9% year-on-year and healthcare services’ revenue increased by 9.6%.
For the full financial year, the group expects continued activity growth in its Southern African operations, driven by growth in volumes from network deals and through the effect of acquisitions concluded in the past year.
It expected annual Southern African PPD growth of about 2% for the full year, which, coupled with CPI-related tariff increases and continued growth in the SA imaging business, could result in 2024 revenue growth of 6%-7%, it said.
Life Healthcare’s earnings jump on strong activity in Southern African
The group expects full-year earnings to improve by more than 20%
Life Healthcare has reported higher earnings at the halfway stage and expects continued activity growth in its southern African operations.
Headline earnings per share (HEPS) from continuing operations were up 29.9% at 47c. An interim dividend of 19c per share was declared, up 11.8% from a year earlier.
Total HEPS from continuing and discontinued operations increased by 63% to 65.2c.
Revenue from continuing operations was 7.8% higher at R11.7bn driven by robust activity growth in Southern Africa and strong growth in NeuraCeq doses sold, the company said in a statement on Wednesday.
Profit after tax from continuing operations increased to R735m from R600m before.
The group concluded the disposal of AMG at the end of January; it has been disclosed as a discontinued operation and is not included in the results of the continuing operations for the first half.
Life received R10.2bn in net cash proceeds from the disposal after the settlement of all offshore debt and transaction costs. The special dividend of R8.8bn was paid on April 8.
After the reimbursement approval of a disease-modifying drug in the US in October 2023, doses sold of NeuraCeq grew 74.4%, contributing to revenue growth in Life Molecular Imaging of 77.5%.
The group’s Southern African operations experienced strong demand for their services, which led to higher utilisation of the group’s hospitals and complementary services, with paid patient day (PPD) growth of 2.3%.
Revenue for Southern Africa grew by 5.9%. The normalised earnings before interest, tax, depreciation and amortisation (ebitda) margin was affected by lower-than-expected occupancies in the first quarter, increased costs associated with running the business and a negative case mix towards more medical cases at a lower revenue per PPD when compared with surgical cases.
The case mix is partly temporary due to the timing of the Easter holidays, which resulted in less theatre activity.
As part of its portfolio optimisation, Life closed two facilities during the previous period — a small maternity facility in Gauteng and an acute rehabilitation facility in Bloemfontein.
Its full-year results were expected to show an increase of more than 20% on continued activity growth in its Southern African operations, driven by growth in volumes from network deals and through the impact of acquisitions concluded in the past 12 months, it said.
Its acute hospitals delivered strong revenue growth in the current period, with PPDs growing by 2.7%, benefiting from the new network deals that started in January 2023. The robust PPD growth translated into higher occupancy across its acute hospital facilities, with a weighted average occupancy of 66.6% compared with 65.5% in the previous period.
Acute hospital revenue grew 5.5% year-on-year after being positively affected by the robust PPD volume growth.
The group’s complementary services reported revenue growth of 7.9% year-on-year and healthcare services’ revenue increased by 9.6%.
For the full financial year, the group expects continued activity growth in its Southern African operations, driven by growth in volumes from network deals and through the effect of acquisitions concluded in the past year.
It expected annual Southern African PPD growth of about 2% for the full year, which, coupled with CPI-related tariff increases and continued growth in the SA imaging business, could result in 2024 revenue growth of 6%-7%, it said.
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