May 23, 2019 / 6:51 AM / 2 months ago

UPDATE 1-Mediclinic core profit falls on Swiss regulatory changes

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JOHANNESBURG, May 23 (Reuters) - Mediclinic International Plc, reported a 4% fall in full-year core profit on Thursday, in line with market expectations, hit by regulatory changes for its Swiss business.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the year ended March 31 fell to 493 million pounds ($623 million) from 515 million a year earlier, in line with estimates in a Refinitiv poll.

Mediclinic, which also has operations in southern Africa and the Middle East, has faced stricter regulations in Switzerland that have hobbled growth and put pressure on margins. These include tariff reductions for outpatients and a less favourable insurance mix.

“The operating performance was impacted by the lower contribution from Hirslanden (Swiss), offset by an improved performance in the second half of the financial year from Mediclinic Southern Africa and Mediclinic Middle East,” the firm said in a statement.

Hirslanden, the Swiss business that accounts for 47% of group revenue, reported a 10% fall in adjusted EBITDA and a 16% EBITDA margin, down from 18.3% a year earlier.

The regulatory changes in Switzerland also led to non-cash impairment charges on Hirslanden property, equipment and vehicles of 186 million pounds and trade names of 55 million pounds, Mediclinic added.

$1 = 0.7911 pounds Reporting by Nqobile Dludla; Editing by Jason Neely and Mark Potter

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