Life Healthcare says trading towards the end of 2020 beat expectations
Hospital occupancies enjoy a healthy improvement in October and November when elective surgeries resumed
Life Healthcare, SA’s second-biggest JSE-listed private hospital operator, says a return of patients for elective surgeries resulted in better-than-expected trading in the last three months of 2020, though that is when a second wave of Covid-19 struck SA.
Hospital occupancies saw healthy improvement in October and November, the group said in a trading update for the quarter to end-December, the first of its 2021 year, but South Africa’s second wave of Covid-19 in December then resulted in a higher volume of patients than the first.
South African hospital operators have been battling with the additional costs of Covid-19, such as equipment and staff costs, with the pandemic also keeping patients from scheduling non-essential surgeries, resulting in pressure on profits.
Life Healthcare said on Wednesday that it had learnt lessons on cost control and patient management from the first wave of Covid-19. It managed to grow its first-quarter normalised earnings before interest, taxation, depreciation and amortisation (ebitda) by 34% from the three months to end-September.
This measure of operational profit in the three months ending December was, however, still down 15% from the same period in the prior financial year.
Paid patient days increased to 58% in October 2020 and 60% in November, from 53% in September, the group said, with its first-quarter revenue growing 5% on a like-for-like basis when compared with the previous year.
The group was hit by a second Covid-19 wave in December with hospitals restricting and then stopping elective surgeries to cope with the increasing number of Covid-19 patients.
Occupancy for December, which is traditionally a quiet period, was at 55.2%, from 54.8% in December 2019, driven by increased Covid-19 admissions, the group said.
Life Healthcare operates 66 health-care facilities in Southern Africa. It also owns Alliance Medical, a leading independent provider of medical imaging services operating across 10 countries in Europe.
In morning trade on Wednesday Life Healthcare’s share was up 2.92% to R19.35, having fallen by almost a quarter over the past 12 months.
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