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Unaudited interim group results for the six months ended 30 September 2015 and declaration of cash dividend
MEDICLINIC INTERNATIONAL LIMITED
Incorporated in the Republic of South Africa
Registration number: 1983/010725/06
Income tax no: 9950122714
Share code: MDC
NSX share code: MCI
ISIN share code: ZAE000074142
("Mediclinic" or "the Company")
UNAUDITED INTERIM GROUP RESULTS OF MEDICLINIC INTERNATIONAL LIMITED
AND ITS SUBSIDIARIES FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2015
AND DECLARATION OF CASH DIVIDEND
Strong half-year results with good growth in all regions
Financial highlights
· Normalised revenue increased by 16% to R19 565m (2014: R16 828m)
· Normalised EBITDA increased by 16% to R3 850m (2014: R3 329m)
· Adjusted* basic normalised headline earnings per share increased by 19% to 214.1 cents
· Margins stable at 19.7%
· Cash and cash equivalents at period end were R5 733m, an increase of 20% (31 March 2015: R4 779m)
· Interim dividend per ordinary share increased by 16% to 36.0 cents (2014: 31.0 cents)
Operational and corporate highlights
• Total investment in capital projects and new equipment of R1 484m, across all three operating platforms
• Successful R10bn rights issue and acquisition of 29.9% in Spire Healthcare Group plc, a leading provider
of private healthcare, with 39 private hospitals throughout the UK
• On 14 October 2015, the proposed combination of Mediclinic and Al Noor Hospitals Group plc, a private
healthcare provider primarily in the emirate of Abu Dhabi and listed on the London Stock Exchange,
was announced. The proposed combination remains subject to various conditions, including Mediclinic
and Al Noor shareholder approval
• Implemented restructuring of Mpilo 1 Investment Holdings ("BEE empowerment transaction") with lock-in
period extended to December 2019
Danie Meintjes, CEO of Mediclinic International, commented:
“We are pleased to announce a strong set of interim results, with revenue and profits demonstrating the
success of our strategy.
The Group continues to deliver against its key performance indicators with high levels of cash generation,
growth in patient activity, stable margins and effective cost control. This is against a market backdrop of
increasing demand for our services providing geographic expansion opportunities. With both a strengthened
balance sheet via a successful rights issue, and capital investments made during the period, Mediclinic
remains well positioned for future growth."
CONSOLIDATED SUMMARISED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
as at as at as at
30/9/2015 30/9/2014 31/3/2015
R'm R'm R'm
ASSETS
Non-current assets 83 656 60 836 65 813
Property, equipment and vehicles 60 750 49 620 53 776
Intangible assets 13 050 10 787 11 565
Investments in associates 9 377 3 2
Investment in joint venture 63 65 65
Other investments and loans 76 67 93
Derivative financial instruments 9 16 10
Deferred income tax assets 331 278 302
Current assets 15 639 12 307 13 366
Inventories 1 170 972 1 074
Trade and other receivables 8 682 6 521 7 479
Current income tax assets 54 66 34
Cash and cash equivalents 5 733 4 748 4 779
Total assets 99 295 73 143 79 179
EQUITY AND LIABILITIES
Total equity 48 994 29 335 33 162
Share capital and reserves 47 902 28 374 32 064
Non-controlling interests 1 092 961 1 098
LIABILITIES
Non-current liabilities 42 154 35 707 38 078
Borrowings 30 273 27 202 27 927
Deferred income tax liabilities 8 810 7 312 7 729
Retirement benefit obligations 1 823 523 1 292
Provisions 788 544 665
Derivative financial instruments 460 126 465
Current liabilities 8 147 8 101 7 939
Trade and other payables 6 248 4 957 6 032
Borrowings 1 136 1 705 1 229
Provisions 533 465 429
Derivative financial instruments 7 21
Current income tax liabilities 223 974 228
Total liabilities 50 301 43 808 46 017
Total equity and liabilities 99 295 73 143 79 179
Net asset value per ordinary share cents 4 961.1 3 321.4 3 752.5
CONSOLIDATED SUMMARISED INCOME STATEMENT
Unaudited Unaudited
6 months 6 months Audited
to to year to
Notes 30/9/2015 Increase 30/9/2014 31/3/2015
R'm % R'm R'm
Revenue 19 565 16% 16 828 35 238
Cost of sales (11 224) (9 742) (19 887)
Administration and other operating expenses (4 488) (3 784) (8 116)
Operating profit before depreciation(EBITDA) 1 3 853 17% 3 302 7 235
Depreciation and amortisation (860) (723) (1 512)
Operating profit 2 993 2 579 5 723
Other gains and losses 2 57 190 93
Income from associates 2
Income from joint venture (2) (2) (1)
Finance income 75 52 103
Finance cost 3 (616) (602) (1 179)
Profit before tax 2 507 2 217 4 741
Income tax expense (498) (428) (206)
Profit for the period 2 009 1 789 4 535
Attributable to:
Equity holders of the Company 1 868 1 668 4 297
Non-controlling interests 141 121 238
2 009 1 789 4 535
Number Number Number
PER SHARE PERFORMANCE '000 '000 '000
Weighted average number of shares
Number of shares net of treasury shares 852 892 810 384 810 878
Rights issue 11 263
Accelarated bookbuild offering 11 458 31 901
Adjustment for Right Offer (IAS33 para 26) 8 407 21 017 21 017
Adjustment for accelarated bookbuilding -
offering (IAS33 para 26) 606 606
Weighted average number of ordinary
shares in issue 872 562 843 465 864 402
Diluted weighted average number of shares
Weighted average number of shares. 872 562 843 465 864 402
Adjustment for dilutive treasury shares 14 888 16 561 15 932
Diluted weighted average number of
ordinary shares in issue 887 449 860 026 880 334
Earnings per ordinary share cents cents cents
Basic earnings basis 214.1 8% 197.8 497.1
Diluted earnings basis 210.5 193.9 488.1
Basic headline earnings basis 213.8 16% 184.4 472.1
Diluted headline earnings basis 210.2 180.8 463.6
Adjusted basic normalised headline earnings basis 214.1 19% 180.6 398.3
Adjusted diluted normalised headline earnings basis 210.5 177.1 391.1
Dividends per ordinary share
interim 36.0 31.0 31.0
final n/a n/a 75.5
EARNINGS RECONCILIATION R'm R'm R'm
Profit attributable to shareholders 1 868 12% 1 668 4 297
Re-measurements for headline earnings (3) (131) (248)
Profit on sale of property, equipment and vehicles (3) (4) (87)
Impairment of property 31 31
Insurance proceeds (158) (158)
Gain on disposal of subsidiary (34)
Income tax effects 18 32
Headline earnings 1 865 20% 1 555 4 081
Re-measurements for normalised headline earnings (57) (32) (613)
Realised gain on foreign currency forward contracts (32) (32)
Ineffective cash flow hedges (57) 342
Swiss tax charges relating to prior years (712)
Discount on repayment of loan (211)
Income tax effects 12 (25)
Normalised headline earnings 1 820 20% 1 523 3 443
CONSOLIDATED SUMMARISED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited
6 months 6 months Audited
to to year to
30/9/2015 Increase 30/9/2014 31/3/2015
R'm % R'm R'm
Profit for the period 2 009 12% 1 789 4 535
Other comprehensive income
Items that may be reclassified to the income statement
Currency translation differences 4 933 (204) 1 643
Fair value adjustment to cash flow hedges (net of tax) 23 (102) (94)
Items that may not be reclassified to the
income statement
Actuarial gains and losses (280) 2 (561)
Other comprehensive income, net of tax 4 676 (304) 988
Total comprehensive income for the period 6 685 1 485 5 523
Attributable to:
Equity holders of the Company 6 543 1 364 5 287
Non-controlling interests 142 121 236
6 685 1 485 5 523
CONSOLIDATED SUMMARISED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited
6 months 6 months Audited
to to year to
30/9/2015 30/9/2014 31/3/2015
R'm R'm R'm
Opening balance 33 162 25 391 25 391
Shares issued 10 000 3 178 3 178
Share issue costs (90) (64) (64)
Movement in shares held in treasury (17) (20) (16)
Movement in share-based payment reserve 12 11 24
Increase in non-controlling interests (30) 12 62
Total comprehensive income for the period 6 685 1 485 5 523
Transactions with non-controlling shareholders (5) 1 9
Distributed to shareholders (605) (564) (822)
Distributed to non-controlling interests (118) (95) (123)
Closing balance 48 994 29 335 33 162
Comprising
Share capital 24 051 14 141 14 141
Treasury shares (282) (269) (265)
Share-based payment reserve 195 170 183
Foreign currency translation reserve 15 772 8 994 10 840
Hedge reserve (62) (93) (85)
Retained earnings 8 228 5 431 7 250
Shareholders' equity 47 902 28 374 32 064
Non-controlling interests 1 092 961 1 098
Total equity 48 994 29 335 33 162
CONSOLIDATED SUMMARISED STATEMENT OF CASH FLOWS
Unaudited Unaudited
6 months 6 months Audited
to to year to
Notes 30/9/2015 30/9/2014 31/3/2015
R'm R'm R'm
Cash flow from operating activities 2 383 2 726 6 008
Cash generated from operations 3 259 3 692 7 848
Net finance cost (439) (455) (916)
Taxation paid (437) (511) (924)
Cash flow from investment activities (10 131) (2 386) (4 594)
Investment to maintain operations (483) (377) (1 215)
Investment to expand operations (1 001) (711) (2 214)
Business combinations 8 (1 440) (1 446)
Proceeds on disposal of property,
equipment and vehicles 11 7 98
Disposal of subsidiary 45
Insurance proceeds 134 158
Loan repaid/(advanced) 20 (25)
Proceeds from other investments and loans 1 5
Investment in associate 9 (8 678)
Cash flow from financing activities 8 287 876 (361)
Proceeds from shares issued 10 000 3 178 3 178
Share issue costs (89) (64) (64)
Distributions to shareholders (605) (564) (822)
Distributions to non-controlling interests (118) (95) (123)
Proceeds from borrowings 5 4 982
Repayment of borrowings (835) (1 577) (7 443)
Proceeds from disposal of treasury shares 4 2 5
Treasury shares purchased (22) (22) (22)
Acquisition of non-controlling interests (34)
Proceeds on disposal of non-controlling
interests
Refinancing transaction costs (14) (125)
Proceeds on disposal of non-controlling
interest 13 73
Net movement in cash and cash equivalents 539 1 216 1 053
Opening balance of cash and cash equivalents 4 779 3 485 3 485
Exchange rate fluctuations on foreign cash 415 47 241
Closing balance of cash and cash equivalents 5 733 4 748 4 779
SUMMARISED SEGMENTAL REPORTS
Unaudited Unaudited
6 months 6 months Audited
to to year to
30/9/2015 30/9/2014 31/3/2015
R'm R'm R'm
Revenue
Southern Africa 6 759 6 206 12 323
Switzerland 10 310 8 646 18 610
Middle East 2 496 1 976 4 305
19 565 16 828 35 238
EBITDA
Southern Africa 1 460 1 303 2 676
Switzerland 1 871 1 609 3 619
Middle East 522 390 940
3 853 3 302 7 235
Operating profit
Southern Africa 1 247 1 120 2 282
Switzerland 1 297 1 140 2 636
Middle East 449 319 805
2 993 2 579 5 723
NOTES TO THE SUMMARISED FINANCIAL STATEMENTS
Unaudited Unaudited
6 months 6 months Audited
to to year to
30/9/2015 Increase 30/9/2014 31/3/2015
R'm % R'm R'm
1. EBITDA RECONCILIATION
Operating profit before depreciation (EBITDA) 3 853 3 302 7 235
Adjusted for:
Impairment of property and equipment 31 31
Profit on sale of property, equipment and vehicles (3) (4) (87)
Normalised EBITDA 3 850 16% 3 329 7 179
2. OTHER GAINS AND LOSSES
Realised gain on foreign currency forward contracts 32 32
Gain on disposal of subsidiary 34
Movement in ineffective cash flow hedges
Ineffective cash flow hedges 57 (342)
Discount on loan repayment 211
Insurance proceeds 158 158
57 190 93
3. FINANCE COST
Interest 496 465 933
Amortisation of capitalised financing costs 56 73 147
Preference share dividend 65 64 128
Less: amounts included in the cost of qualifying assets (1) (29)
616 602 1 179
4. COMMITMENTS
Capital commitments 3 698 3 450 3 779
Southern Africa 2 202 1 897 2 325
Middle East 981 626 782
Switzerland 515 927 672
5. EXCHANGE RATES R R R
Average Swiss franc (ZAR/CHF) 13.17 11.82 11.91
Closing Swiss franc (ZAR/CHF) 14.20 11.82 12.55
Average UAE dirham (ZAR/AED) 3.42 2.90 3.01
Closing UAE dirham (ZAR/AED) 3.77 3.09 3.32
Average GBP (ZAR/GBP) (24 August 2015 to 30 Sep 2015) 20.84 n/a n/a
Closing GBP (ZAR/GBP) 20.99 n/a n/a
6. NUMBER OF SHARES ISSUED Number Number Number
'000 '000 '000
Ordinary shares in issue 979 068 867 957 867 957
Ordinary shares held in treasury (13 524) (13 674) (13 483)
Ordinary shares in issue net of treasury shares 965 544 854 283 854 474
7. FAIR VALUE MEASUREMENT
Derivative financial instruments comprise interest rate swaps and are measured at the present value of future
cash flows estimated and discounted based on the applicable yield curves derived from quoted interest rates.
Based on the degree to which the fair values are observable, the interest rate swaps are grouped as Level 2.
Level 2 means that inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices),
whereas Level 1 refers to quoted prices (unadjusted) in active markets for identical assets or liabilities.
Unaudited Unaudited
6 months 6 months Audited
to to year to
30/9/2015 30/9/2014 31/3/2015
R'm R'm R'm
8. BUSINESS COMBINATIONS
Cash flow on business combinations
Hirslanden Clinique La Colline SA 1 333 1 333
Swissana Clinic AG 107 107
IMRAD SA 6
1 440 1 446
On 25 June 2014, Hirslanden AG acquired a 100%
interest in the operating company of Hirslanden
Clinique la Colline SA. Hirslanden Clinique La
Colline SA is a private hospital based in
Geneva, Switzerland.
9. INVESTMENT IN ASSOCIATE
Spire Healthcare Group plc (8 678)
On 24 August 2015, the Group acquired a 29.9% shareholding in Spire Healthcare Group plc ("Spire"), a
leading private healthcare group in the UK with a national network of 39 hopitals across the United Kingdom.
The investment in Spire provides Mediclinic with a further opportunity to diversify into an attractive new
geography with a strong currency. The group and Spire will benefit from collaboration, with the potential to
unlock procurement benefits and knowledge transfer. On 15 July 2015, Remgro Limited, through its wholly-owned
subsidiary, Remgro Jersey Ltd (subsequently renamed to Mediclinic Jersey Ltd), acquired 119 923 335 Spire
shares equivalent to a 29.9% shareholding. The purchase of the equity investment were negotiated jointly by
Mediclinic and Remgro with the seller. Mediclinic acquired Remgro's indirect shareholding in Spire for an
amount equal to the aggregate of the purchase price paid by Remgro Jersey Ltd, transaction costs and funding
costs, totalling approximately R8.7 billion. The Spire acquisition was effected through a series of
transactions which ultimately resulted in Mediclinic Investments (Pty) Ltd, through a wholly-owned subsidiary,
Business Venture Investments No 1871 (Pty) Ltd, owning 100% of the shares in Mediclinic Jersey Ltd, which is
company directly holds the 29.9% interest in Spire.
OVERVIEW AND OUTLOOK
Notwithstanding the ongoing changes in the global and regional economies and the regulatory changes that
continue to impact healthcare and its affordability, we are continuing to see a strong demand for quality
private healthcare services in our three operating platforms. The trend is also prevalent in the UK, where
during the period we acquired a 29.9% stake in Spire Healthcare Group plc, a leading provider of private
healthcare, with 39 private hospitals.
Mediclinic International has continued to deliver strong revenue and profit growth. Our three operating
platforms in Southern Africa, the Middle East and Switzerland have all achieved good growth in patient
numbers and we continue to invest in buildings, technology and people to ensure we offer high quality
private healthcare services to both in and out-patients.
The Group’s earnings which are reported in South African rand, were again positively impacted by currency
movements Our Swiss, Middle East and UK platforms contributed 66% of adjusted normalised headline earnings.
Our focus is to ensure that our patients come first, that we continuously improve our value proposition in
terms of technology, care and the latest improvements in medicine and surgery. With three operating platforms
and a significant investment in the UK, we can leverage best practice in terms of experience, knowledge and
skills. Mediclinic remains well positioned for future growth.
TRADING RESULTS
The Group has maintained its consistent growth pattern.
Group normalised revenue increased by 16% to R19 565m (2014: R16 828m) for the period under review.
Normalised operating profit before interest, tax, depreciation and amortisation (“normalised EBITDA”)
was 16% higher at R3 850m (2014: R3 329m) and adjusted basic normalised headline earnings per share
was 19% higher at 214.1 cents (2014: 180.6 cents) with margins stable at 19.7%.
The current Group results included the following adjustment to determine normalised headline earnings:
• An exceptional item of R57m (R45m after tax) to account for the six-month (1 April 2015 to
30 September 2015) mark-to-market fair value adjustment relating to the Swiss interest rate swaps,
which became ineffective during the prior financial year ended 31 March 2015 with the introduction
of negative Swiss interest rates.
The comparative results include a one-off item of R32m (R32m after tax) relating to a realised gain on
foreign currency forward contracts.
*Effective from 24 August 2015, the Group acquired a 29.9% shareholding in Spire Healthcare Group plc.
As Spire’s accounting period ends on 31 December and the investment was made after 30 June 2015, no
income from associate was included for the period under review. An adjustment to normalised headline
earnings of R48m (R48m after tax) has been made to account for income from the associate for the
period 24 August 2015 to 30 September 2015.
Excluding the adjustment and including the exceptional item, headline earnings for the period under
review increased by 20% to R1 865m (2014: R1 555m) and basic headline earnings per ordinary share i
ncreased by 16% to 213.8 cents (2014: 184.4 cents).
Movements in the exchange rates had a positive impact on the reported results. The average ZAR/Swiss
franc (CHF) exchange rate was R13.17 compared to R11.82 for the comparative period and the average
ZAR/UAE dirham (AED) exchange rate was R3.42 compared to R2.90 for the comparative period.
Finance cost
Finance cost includes amortisation of capitalised financing costs of R56m (2014: R73m). The capitalised
financing costs are amortised over the term of the relevant loans in accordance with IAS 39 Financial
Instruments.
Cash flow
The Group continued to deliver strong cash flow. The Group converted 85% (2014: 111%) of normalised
EBITDA into cash generated from operations. Cash and cash equivalents increased from R4 779m at
31 March 2015 to R5 733m at 30 September 2015.
Interest-bearing borrowings
Interest-bearing borrowings increased from R29 156m at 31 March 2015 to R31 409m at 30 September 2015.
The increase is mainly as a result of change in the closing ZAR/CHF and the ZAR/AED exchange rates.
Foreign debt of the Group’s Swiss and Middle Eastern operations, amounting to R25 912m, is matched
with foreign assets in the same currencies. The foreign debt has no recourse to the Southern African
operations’ assets.
Assets
Property, equipment and vehicles increased from R53 776m at 31 March 2015 to R60 750m at 30 September
2015, and intangible assets increased from R11 565m at 31 March 2015 to R13 050m at 30 September 2015.
These increases are mainly as a result of additions as well as the change in the closing ZAR/CHF and
the ZAR/AED exchange rates.
Weighted average number of shares adjustment
In terms with IAS 33 paragraph 26, an adjustment to the weighted average number of shares in issue for
the period under review and the prior year is required. Consequently, the basic headline earnings per
share for the prior year was adjusted and decreased by 4.6 cents from 189.0 to 184.4 cents and basic
normalised headline earnings per share for the prior year decreased by 4.6 cents from 185.2 to 180.6 cents.
Normalised non-IFRS financial measures
The Group uses normalised revenue, normalised EBITDA, normalised headline earnings and normalised basic
headline earnings per share as non-IFRS measures in evaluating performance and as a method to provide
shareholders with clear and consistent reporting. These non-IFRS measures are defined as reportable EBITDA,
headline earnings and basic headline earnings per share in terms of accounting standards, excluding one-off
and exceptional items.
CORPORATE ACTIVITY
As previously released on the JSE Stock Exchange News Service (SENS), the Group successfully executed the
following corporate actions during the period under review:
• the Group raised R10bn through a rights issue that closed on 21 August 2015;
• funded by the rights issue referred to above, the Group acquired a 29.9% shareholding in Spire
Healthcare Group plc, a leading private healthcare group led by a strong and highly experienced
management team with a national network of 39 hospitals across the United Kingdom, for R8.7bn with
effect from 24 August 2015; and
• restructuring of the Mpilo Investments Holdings 1 (RF) (Pty) Ltd black economic empowerment transaction
established in 2005, with the benefit to Mediclinic of extending the lock-in period by an additional
three years to 31 December 2019.
OPERATIONS IN SOUTHERN AFRICA
MEDICLINIC SOUTHERN AFRICA
Financial and business performance
Mediclinic Southern Africa’s normalised revenue increased by 9% to R6 759m (2014: R6 206m) for the period
under review. Normalised EBITDA was 9% higher at R1 457m (2014: R1 332m). The revenue growth was driven by
a 3.2% increase in bed-days sold and a 6.1% increase in the average income per bed-day. The number of
patients admitted increased by 1.2%, while the average length of stay increased by 2.1%.
The Southern African operations contributed R626m (2014: R571m) to the normalised headline earnings of
the Group.
Projects and capital expenditure
During the period under review, the Southern African operations spent R376m (2014: R364m) on expansion
capital projects and new equipment and R112m (2014: R89m) on the replacement of existing equipment. In
addition, R151m (2014: R174m) was spent on the repair and maintenance of property and equipment, charged
through the income statement.
For the current financial year, R813m is budgeted for expansion capital projects and new equipment,
R333m for the replacement of existing equipment and R316m for repairs and maintenance. Incremental EBITDA
resulting from capital projects in progress or approved is budgeted to amount to R56m and R55m in 2016
and 2017 respectively.
The number of beds increased from 7 885 to 7 983 during the period under review of which the most significant
were the Mediclinic Limpopo Day Clinic and Mediclinic Durbanville Day Clinic.
The number of beds is expected to increase from 7 983 to 8 070 during the next six months.
Regulatory environment
The Competition Commission is still in the process of undertaking a market inquiry into the private healthcare
sector in South Africa. In line with the Commission’s published Terms of Reference and Administrative Guidelines,
Mediclinic prepared and delivered a comprehensive submission and has submitted further information and data as
requested by the Commission. Mediclinic has the assistance of expert legal and economic advisors and we believe
that we are well prepared to participate fully in the inquiry. In terms of the Commission’s latest timetable,
the inquiry should be completed by December 2016.
Mediclinic awaits the final norms and standards as set by the Minister of Health in terms of the tasks of
the Office of Health Standards Compliance. We support this initiative and believe this to be a positive
development that should enhance the quality of care in both the public and private healthcare sectors once
it has been implemented comprehensively.
OPERATIONS IN SWITZERLAND
HIRSLANDEN
Financial and business performance
Hirslanden’s normalised revenue increased by 19% to R10 310m (2014: R8 646m) for the period under review.
Normalised EBITDA was 16% higher at R1 871m (2014: R1 607m). In Swiss francs, normalised revenue increased by
7% to CHF 783m (2014: CHF732m) and normalised EBITDA increased by 4% to CHF142m (2014: CHF136m). The normalised
revenue growth is a result of a 6.5% increase in inpatient admissions and increased revenue per case due to
increased numbers of complex cases.
Hirslanden contributed R763m (2014: R657m) to the normalised headline earnings of the Group. In Swiss francs,
Hirslanden contributed CHF58m (2014: CHF55m) to the normalised headline earnings of the Group.
Projects and capital expenditure
During the period under review, Hirslanden invested R289m (CHF22m) (2014: R289m (CHF24m)) in expansion capital
projects and new equipment and R329m (CHF21m) (2014: R274m (CHF23m)) on the replacement of existing equipment.
In addition, R248m (CHF18m) (2014: R217m (CHF18m)) was spent on the repair and maintenance of property and
equipment, charged through the income statement.
For the current financial year CHF70m is budgeted for expansion capital projects and new equipment, CHF80m for
the replacement of existing equipment and CHF39m for repairs and maintenance. Incremental EBITDA resulting
from capital projects in progress or approved is budgeted to amount to CHF8m and CHF6m in 2016 and 2017
respectively.
The number of inpatient beds increased from 1 655 to 1677 during the period under review. The number of
inpatient beds is expected to remain stable during the next six months.
Regulatory environment
Outpatient management initiatives
Recently there have been discussions regarding the revision of the Health Care Insurance Act and the management
of the outpatient sector. Furthermore the moratorium on new doctors’ practices initially adopted in 2002 and
extended several times is now due to become a permanent law. The revision of the outpatient tariff (“TARMED”) is
also being considered and expected to be implemented in 2017 or 2018.
Highly specialised medicine
Over the last few months there have been no relevant decisions made regarding highly specialised medicine.
OPERATIONS IN UNITED ARAB EMIRATES
MEDICLINIC MIDDLE EAST
Financial and business performance
Mediclinic Middle East’s normalised revenue increased by 26% to R2 496m (2014: R1 976m) for the period under
review. Normalised EBITDA increased by 34% to R522m (2014: R390m). In UAE dirhams, normalised revenue increased
by 7% to AED730m (2014: AED681m) and normalised EBITDA increased by 13% to AED153m (2014: AED135m). The revenue
growth was driven by bed-days sold increasing by 1%, hospital outpatient consultations and visits to the
emergency units increasing by 1% and clinic outpatient consultations increasing by 4%.
Mediclinic Middle East contributed R431m (2014: R295m) to the normalised headline earnings of the Group. In
UAE dirhams, Mediclinic Middle East contributed AED126m (2014: AED102m) to the normalised headline earnings
of the Group.
Projects and capital expenditure
During the period under review, Mediclinic Middle East invested R335m (AED98m) (2014: R57m (AED20m)) in expansion
capital projects and new equipment, apart from R43m (AED12m) (2014: R14m (AED5m)) on the replacement of existing
equipment. In addition, R35m (AED10m) (2014: R26m (AED9m)) was spent on repairs and maintenance of property and
equipment, as accounted for in the income statement.
For the current financial year, AED133m is budgeted for expansion capital projects and new equipment to enhance
the business in the longer term and AED145m is budgeted for the construction of the Mediclinic Parkview Hospital,
AED32m for the replacement of existing equipment and AED20m for repairs and maintenance. EBITDA resulting from
capital projects in progress or approved is budgeted to amount to AED18m in 2017.
The number of beds remained at 382, which includes 27 day beds available at the clinics.
During the period under review, Mediclinic City Hospital continued construction on the north wing extension,
due to open in mid-2016. Furthermore, land was recently acquired in the fast-growing southern side of Dubai
for the construction of the 188-bed Mediclinic Parkview Hospital.
Regulatory environment
The Dubai Health Authority (“DHA”) is now in the final phase of introducing mandatory health insurance, intended
to ensure that all individuals have a health insurance plan. The introduction of mandatory health insurance in
Dubai is not expected to have a significant impact on the results of the Group, since our target market already
had high levels of health insurance prior to mandatory insurance. The DHA also commenced with a process of price
reform, which will be gradually implemented over a number of years. The DHA has indicated that prices will
not be set and the principle of price negotiations between providers and funders will be maintained within this
new pricing framework.
EVENTS AFTER THE REPORTING PERIOD
A significant event occurred between 30 September 2015 and 12 November 2015 which is not reflected in the interim
summarised financial statements.
The possible combination of Mediclinic and Al Noor Hospitals Group plc, a private healthcare provider primarily
based in the emirate of Abu Dhabi and listed on the London Stock Exchange, was released on SENS on 14 October 2015.
The proposed combination remains subject to various suspensive conditions, including Mediclinic and Al Noor
shareholder approval.
CHANGES TO THE BOARD OF DIRECTORS
There were no changes to the Board during the period under review.
BASIS OF PREPARATION
The accounting policies applied in the preparation of these summarised Group interim financial statements, which
are based on reasonable judgements and estimates, are in accordance with International Financial Reporting
Standards ("IFRS") and are consistent with those applied during the year ended 31 March 2015. The summarised Group
interim financial statements have been prepared in accordance with the Financial Reporting Guides issued by the
Accounting Practices Committee of the South African Institute of Chartered Accountants and in terms of IAS 34
Interim Financial Reporting as well as in compliance with the Companies Act 71 of 2008, as amended, and the
Listings Requirements of the JSE Limited. The preparation of the summarised Group interim financial statements
was supervised by the Chief Financial Officer, Mr CI Tingle, CA(SA).
CASH DIVIDEND TO SHAREHOLDERS
Notice is hereby given that the directors have declared an interim gross cash dividend in respect of the period
under review of 36.0 cents (2014: 31.0 cents) (30.60 cents (2014: 26.35 cents) net of dividend withholding tax)
per ordinary share. The dividend declared increased by 16% compared to the comparative period.
The dividend has been declared from income reserves. A dividend withholding tax of 15% will be applicable to all
shareholders who are not exempt therefrom. The Company’s issued share capital at the declaration date is
979 068 436 ordinary shares.
The salient dates for the dividend will be as follows:
Last date to trade cum dividend Friday, 27 November 2015
First date of trading ex dividend Monday, 30 November 2015
Record date Friday, 4 December 2015
Payment date Monday, 7 December 2015
Share certificates may not be dematerialised or rematerialised from Monday, 30 November 2015 to Friday,
4 December 2015, both days inclusive.
Signed on behalf of the board of directors:
E DE LA H HERTZOG D P MEINTJES
Chairman Chief Executive Officer
Stellenbosch, 12 November 2015
DIRECTORS
Dr E de la H Hertzog (Chairman), DP Meintjes (Chief Executive Officer), CI Tingle (Chief Financial Officer),
JJ Durand, JA Grieve (British), Prof Dr RE Leu (Swiss), Dr MK Makaba, N Mandela, TD Petersen, KHS Pretorius,
AA Raath, DK Smith, PJ Uys, Dr CA van der Merwe, Dr TO Wiesinger (German)
COMPANY SECRETARY
GC Hattingh
HEAD OFFICE ADDRESS AND REGISTERED OFFICE
Mediclinic Offices, Strand Road, Stellenbosch, 7600
Postal address: PO Box 456, Stellenbosch, 7599
Tel: +27 21 809 6500 Fax: +27 21 886 4037
Ethics Line: 0800 005 316 (if dialling from South Africa) or ethics@mediclinic.com
WEBSITE
www.mediclinic.com
TRANSFER SECRETARIES
South Africa:
Computershare Investor Services (Pty) Ltd
70 Marshall Street, Johannesburg, 2001
Postal address: PO Box 61051, Marshalltown, 2107
Tel: +27 11 370 7700 Fax: +27 11 688 7716
Namibia:
Transfer Secretaries (Pty) Ltd
4 Robert Mugabe Avenue, Windhoek
Postal address: PO Box 2401, Windhoek
Tel: +264 (61) 227 647 Fax: +264 61 248 531
SPONSOR
South Africa: Rand Merchant Bank (a division of FirstRand Bank Limited)
Namibia: Simonis Storm Securities (Pty) Ltd
Date: 12/11/2015 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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