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Trading statements

Mediclinic says Abu Dhabi challenges continue

21 February 2017 07:26

Mediclinic International said the challenging environment in Abu Dhabi has unfortunately continued into H2, but was more upbeat about its platforms in Switzerland and South Africa.

"During the year we have seen a good trading performance from our two largest platforms in Switzerland and Southern Africa in line with full year expectations for the full year 2016/17," said CEO Danie Meintjes.

"The challenging environment in Abu Dhabi has unfortunately continued into the second half of the year," he said in a trading update.

Mediclinic was taking many steps to build the foundations for a successful, sustainable, long term business in the Middle East, leveraging its excellent reputation and operational performance in Dubai.

One key step was the re-branding of our Abu Dhabi facilities -- also known as the Al Noor facilities -- to Mediclinic, which it expected to be implemented during 2017/18.

As a result of this decision, the group was reviewing the carrying value (AED140m) and amortisation period of the Al Noor trade name. "The review is expected to result in additional charges in the current and subsequent reporting periods, which will be excluded from underlying earnings."

Mediclinic reiterated that the H2 performance of the Middle East was predicated on seasonality, realising integration synergies, stabilising Thiqa patient volumes, filling doctor vacancies and ramping up patient activity in new facilities.

"Whilst we continue to make good progress in integrating the Al Noor and Mediclinic operations and realising synergies, the second half has been weaker in Abu Dhabi than anticipated and we now expect a steeper revenue decline and a lower underlying EBITDA margin for the Middle East for the full year 2016/17."

It now expected FY 2016/17 Middle East revenue to be in the range of AED3,000m to AED3,200m, with an underlying EBITDA margin of about 10%-11%.

Story provided by StockMarketWire.com

Related Company: MDC

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