The Mediclinic staff hospital is seen in Dubai

Mediclinic flags drop in H1 core profit, shares dive 19 percent

JOHANNESBURG (Reuters) - Mediclinic on Wednesday flagged an 8 percent drop in core profit for the first six months of the year, sending its shares tumbling 19 percent.

The private hospital group, which is listed in London and Johannesburg, blamed weaker-than-expected growth in admissions in Switzerland and a slow second quarter in Southern Africa.

Group adjusted core profit, or EBITDA, would fall to 214 million pounds ($282 million) versus 232 million pounds in the same period a year ago.

Mediclinic said it has faced stricter regulations in recent years in Switzerland that have hobbled growth. The firm did not specify the changes introduced under the new regulations.

In May, the company took a $863 million writedown on its Swiss business, which plunged the company into an annual loss of 288 million pounds.

The firm's Chief Executive, Ronnie van der Merwe, said the regulatory changes in Switzerland had a greater than expected impact on hospital admissions, while in Southern Africa, there were fewer pneumonia and bronchitis cases during the winter.

Van der Merwe said the group expects full year revenue growth in the Middle East to be in the high single-digits from the previously low double-digit guidance range.

Mediclinic's shares in Johannesburg tumbled 19.78 percent to 71.40 rand at 0941 GMT. In London, where Mediclinic has its main listing, shares fell 19.38 percent.

Founded in 1983 in Stellenbosch, South Africa, Mediclinic has transformed itself from a southern African player to one of the biggest hospital groups in Europe and the Middle East.

($1 = 0.7601 pounds)

(Reporting by Nqobile Dludla; Editing by James Macharia)

First Published: 2018-10-17 11:20:26
Updated 2018-10-17 11:57:52

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