Mediclinic International PLC (Mediclinic)

Mediclinic has a March year-end and therefore the results for the 12 months to 31 March 2017 have been equity accounted in Remgro’s results for the year under review. Mediclinic’s contribution to Remgro’s headline earnings for the year under review amounted to R1 875 million (2016: R1 566 million; R1 952 million excluding once-off items and transaction costs).

Mediclinic’s turnover for the financial year ended 31 March 2017 increased by 30% to £2 749 million (2016: £2 107 million). Underlying earnings before interest, tax, depreciation and amortisation (underlying EBITDA) increased by 17% from £428 million to £501 million, while underlying margins declined from 20.4% to 18.2%.

Mediclinic has an interest of 100% in Hirslanden, the holding company of the largest private hospital group in Switzerland. Hirslanden’s revenue for the year under review increased by 3% to CHF1 704 million (2016: CHF1 657 million) and underlying EBITDA was 5% higher at CHF340 million (2016: CHF325 million). The underlying EBITDA margin increased from 19.7% to 20.0% due to several productivity measures and cost-saving initiatives implemented during the year and an underlying tariff provision release of CHF8 million.

Mediclinic Southern Africa’s revenue increased by 7% to R14 367 million (2016: R13 450 million) for the year under review, mainly due to a 0.8% increase in bed-days sold and a 5.8% increase in the average income per bed-day. Underlying EBITDA increased by 6% to R3 049 million (2016: R2 877 million), resulting in the underlying EBITDA margin decreasing from 21.4% to 21.2% due to the ongoing shift in mix towards medical versus surgical cases, wage and cost inflation, higher price increases on pharmaceuticals (sold at zero margin) and investment in additional clinical personnel.

Mediclinic Middle East owns and operates the Welcare Hospital and the City Hospital (the Dubai business), as well as the Al Noor Hospital Group (the Abu Dhabi business) that was acquired on 15 February 2016. The Mediclinic Middle East results represent the combined business for the 2017 financial year, while the Abu Dhabi business’s results were only included from the acquisition date in the comparative period. Revenue increased by 72% to AED3 109 million (2016: AED1 544 million) for the year under review, which resulted from a 5% increase in revenue from the Dubai business, as well as including the Abu Dhabi business for the full financial year. Underlying EBITDA decreased by 5% to AED364 million (2016: AED384 million), while the underlying EBITDA margin decreased from 21.3% to 11.7%. These decreases were due to unexpected regulatory changes in Abu Dhabi, a decline in patient volumes inAbu Dhabi, increased competition and doctor vacancies. The regulatory changes have since then been reversed.

The group remains uniquely positioned across four diverse international operating platforms and continues to invest for growth across these platforms.