Mediclinic operates private hospitals in South Africa, Namibia, Switzerland and the United Arab Emirates.

Group revenue increased by 19% to R10 467m (2010: R8 768m) in the first half of the financial year. Operating profit before interest, tax, depreciation and amortisation (EBITDA) was 17% higher at R2 179m (2010: R1 866m).

Headline earnings rose by 19% to R484m (2010: R407m), while basic headline earnings per ordinary share increased 10% to 77.2 cents (2010: 70.2 cents).  The lower figure for headline earnings per share reflects the increased number of weighted average ordinary shares in issue resulting from last year’s rights offer.

“These results were achieved despite continuing tough global economic conditions. It is another solid all-round performance,” said Dr Edwin Hertzog, Mediclinic Chairman, echoing previous sentiments.

“The Group remains uniquely positioned across three diverse international operating platforms, with stable and experienced management teams in place.”

Revenue increased in all three areas of operation in the first half of the financial year, with group-wide improvements in bed-days sold and in average income per bed-day.

With demand for private healthcare steadily increasing in all three geographies where Mediclinic operates, the Group detailed the considerable amounts being spent on expanding operations, particularly in South Africa and Switzerland. Mediclinic Southern Africa plans to add another 368 beds to existing facilities by 2014, and, in addition, to establish a new 174-bed hospital in Centurion by the end of 2013.

Mediclinic Southern Africa increased revenue by 11% to R4 695m (2010: R4 244m) in the first six months of the financial year. EBITDA was 9% higher at R989m (2010: R910m). The EBITDA margin decreased slightly from 21.4% to 21.1% due to a change in accounting treatment of certain items.

In Mediclinic Switzerland, the Hirslanden operations increased revenue by 28% (8% at constant foreign exchange rates) to R 5 001m (CHF606m) (2010: R3 913m (CHF562m)). EBITDA was 24% higher (4% at constant foreign exchange rates) at R 1 070m (CHF129m) (2010: R866m (CHF124m)). The EBITDA margin decreased from 22.1% to 21.4%.

In Mediclinic Middle East, Emirates Healthcare increased revenue by 26% (35% at constant foreign exchange rates) to R771m (AED406m) (2010: R611m (AED301m)). EBITDA increased by 33% (40% at constant exchange rates) to R120m (AED63m) (2010: R90m (AED45m)) and the EBITDA margin increased from 14.7% to 15.6%.

The interim dividend per share was maintained at 23.0 cents.

Craig Tingle, Group Chief Financial Officer, said Mediclinic’s cash flow continued to be strong. The Group converted 88% (2010: 93%) of EBITDA into cash generated from operations. “Cash and cash equivalents increased from R1 567m at 31 March 2011 to R1 635m at 30 September 2011.”

Interest-bearing debt increased from R22 248m at 31 March 2011 to R26 093m at 30 September, mainly as a result of the change in the closing rand/CHF exchange rate. The CHF closing exchange rate moved from R7.42 at 31 March to R8.96 at 30 September.

“It is important to note that the foreign debt of the Group’s Swiss and Middle Eastern operations, amounting to R22 349m, is matched with foreign assets in the same currencies. The foreign debt also has no recourse to the Southern African operations’ assets,” Tingle said.

In Southern Africa, the number of licensed hospital beds increased from 7 103 to 7 115 in the first half of the year, and is expected to reach 7 237 by the end of the financial year. Building projects in progress and planned will take this to 7 657 licensed beds at the end of the 2014 financial year.

Mediclinic is budgeting just over R1 billion to be spent this year at its Southern African operations on capital projects, new equipment and repairs and maintenance.

The Group noted regulatory considerations in Switzerland and South Africa. In Switzerland, changes to health insurance legislation take effect from January 2012. Surprisingly even at this late stage a number of key aspects are still not finalised. In South Africa, a green paper has been published on the proposed introduction of the National Health Insurance (NHI) system, with comment requested by 30 December 2011. Mediclinic Southern Africa and the Hospital Association of Southern Africa are preparing comprehensive submissions, particularly around areas where further clarity is needed.

Group CEO Danie Meintjes said the group remained optimistic about its operational prospects for the second half of the financial year.

“Although regulatory issues create uncertainties, we are optimistic about the future of our businesses in all three platforms. This is supported by our continued substantial investments in capacity building in all the platforms.

“The Group continuously monitors the regulatory environment and pro-actively participates in discussions with regulatory bodies to inform decision-making and to better understand changes that might impact the Group,” he stated.