Trading statement NETCARE LIMITED (Registration number 1996/008242/06) JSE ordinary share code: NTC ISIN: ZAE000011953 JSE preference share code: NTCP ISIN: ZAE000081121 ("Netcare") TRADING STATEMENT In terms of paragraph 3.4 (b) of the JSE Listings Requirements, a listed company is required to publish a trading statement as soon as it is satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported upon next will differ by at least 20% from those of the previous corresponding period. Netcare will be releasing its audited Group results for the year ended 30 September 2018 (“FY 2018”) on Monday, 19 November 2018. The results for FY 2018 and the comparative year ended 30 September 2017 (“FY 2017”) include sizeable non-trading items of a non-recurring nature (described in more detail below), which affect Earnings per Share (“EPS”) and Headline Earnings per Share (“HEPS”). In addition to the mandatory EPS and HEPS metrics, Netcare also publishes an “adjusted HEPS” figure, which is the primary measure used by management to assess Netcare’s underlying financial performance, and excludes all of the non-trading items of a non-recurring nature set out below. The FY 2018 adjusted HEPS from continuing operations (comprising the SA operations following the deconsolidation and discontinued operation classification of the UK operations) will be substantially in line with the 170.6 cents reported in FY2017. Description of sizable non-trading items of a non-recurring nature 1. FY 2017 As reported in the prior year’s accounts, the FY 2017 results contained the following items: - A non-cash recognition of an onerous lease provision of R1 669 million against BMI Healthcare’s long term leases with its major external landlord (“Onerous lease provision”); - A non-cash impairment of R1 540 million against BMI Healthcare’s property, plant and equipment (“Impairment of PPE”); - A non-cash impairment of R2 354 million against goodwill relating to BMI Healthcare (“Impairment of goodwill”); - A non-cash, fair value accounting credit of R937 million (after tax) on the mark-to-market valuation of Retail Price Index swap instruments related to property leases of the UK operations (“UK RPI swap valuation”); and - A capital profit on the sale of the land and buildings of the old Netcare Christiaan Barnard Memorial Hospital (“CBMH capital profit”) of R169 million (after tax). 2. FY 2018 - As was reported earlier in the year within Netcare’s unaudited interim financial statements, a non-cash profit of R4 205 million has been recognised on the deconsolidation of BMI Healthcare (“Profit on loss of control”). In accordance with accounting standards, the results of the UK operations have been classified as a discontinued operation in the Group statement of profit or loss and comparative results are restated accordingly. - A non-cash impairment of R1 322 million (after tax) has been recognised against the carrying value of Netcare’s contractual economic interest in the debt of BMI Healthcare (“Impairment of contractual economic interest in debt of BMI Healthcare”). - A non-cash, fair value accounting charge of R85 million (after tax) on the mark-to-market valuation of Retail Price Index swap instruments related to property leases of the UK operations in the period prior to deconsolidation(“UK RPI swap valuation”). - A non-cash partial reversal of the onerous lease provision of R168 million. Impact on EPS and HEPS These non-trading items of a non-recurring nature are treated as follows for purposes of calculating EPS and HEPS: Rm FY 2018 FY 2017 EPS HEPS Impairment of contractual (1 322) Included Included economic interest in debt of BMI Healthcare (non-cash) Onerous lease provision 168 (1 669) Included Included reversal/(recognition) (non- cash) UK RPI swap valuation (non- (85) 937 Included Included cash) Profit on loss of control (non- 4 205 Included Excluded cash) Impairment of PPE (non-cash) (1 540) Included Excluded Impairment of goodwill (non- (2 354) Included Excluded cash) CBMH capital profit 169 Included Excluded EPS As a result of all of the above non-trading items of a non-recurring nature, EPS for the year ended 30 September 2018 is anticipated to be between 355.8 cents and 359.9 cents, representing an increase of between 970% and 980% from the loss of 40.9 cents per share reported for FY2017. HEPS As a result of the impairment of the contractual economic interest in debt of BMI Healthcare, the onerous lease provision reversal/(recognition) and the UK RPI swap valuation adjustments, HEPS for the year ended 30 September 2018 is anticipated to be between 44.0 cents and 55.0 cents, representing a decrease of between 50% and 60% from the HEPS of 109.9 cents per share reported for FY2017. The information provided in this trading statement has not been reviewed or reported on by Netcare’s external auditors. Johannesburg 15 November 2018 Sponsor Nedbank Corporate and Investment Banking Date: 15/11/2018 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.