Life Healthcare earnings expected to fall

DURBAN – The Life Healthcare Group took a knock on the JSE yesterday after the private hospital company warned shareholders that its profits would deteriorate further in the second half of its financial year, after falling R160million in the six months to end March.

The share fell 2.68percent to R17.80 after it withdrew its earlier guidance for the year, saying the impact of the coronavirus pandemic on its business would be worse than anticipated in the second half of the financial year. It said its earnings before interest, tax, depreciation and amortisation (Ebitda) were expected to fall between R2.75billion and R2.87bn in the six months to end March from R2.73bn. The group suffered a R240m knock on its revenue as a result of Covid-19.

Life Healthcare said its revenue was projected to increase between 4.4percent and 7.8percent to between R12.95bn and R13.37bn from R12.4bn last year.

“The Covid-19 pandemic has had a significant impact on the trading operations in the group in quarter two of this financial year,” Life Healthcare said. “Due to the diverse geographical locations of the group’s operations, the timing of the spread of the virus within these locations and the responses of the respective governments, the impact has been varied across the regions.”

Life Healthcare has operations in Southern Africa and international units that include Alliance Medical Group in the UK and Scanmed in Poland. It said the Southern Africa business would deliver revenue growth of between 5.1 and 7.4percent to between R9.3bn and R9.5bn. Last year, the business delivered R8.85bn.