Netcare has reported steady improvement in operational and financial performance for the first four months of its 2023 financial year, with group revenue growing 12.3% over the previous matching period.
Margins for its earnings before interest, depreciation and amortisation improved by more than 20%, the group said in a trading update for the four months to January.
The group — worth R21.97bn on the JSE — has gained traction with a number of its product lines.
NetcarePlus, a prepaid offering, has continued to expand its range of services, now including general, gynaecological and orthopaedic surgical procedures. These initiatives are part of the company’s broader strategy to leverage technology and innovation to enhance the patient experience, improve outcomes and drive growth across all divisions.
The group said it remains committed to delivering high-quality, accessible and affordable healthcare services to patients.
In SA’s sluggish economy, companies are increasingly looking for ways to reduce operational costs or to steal market share from competitors by offering consumers better service or products.
The SA medical aid industry has been stagnant with about 8.9-million main members for years, meaning hospital groups face limited growth prospects locally.
Netcare’s strategic projects, which incurred operational costs of R249m in the year to end-September, need to meet at least one of three criteria: differentiate the patient’s experience; grow margins and improve returns; or help the group grow at a pace above the market, the company previously stated.
By April, Netcare hopes all its hospitals will have been added to the group’s hospital electronic system CareOn, which includes the digitalisation of medical records, scripts, patients’ blood and other pathology test results and radiology results, including X-rays.
Total capital expenditure for the full-year is expected to be R1.6bn, of which R111m will be attributable to expansion in mental health, about R600m for refurbishments that were delayed during the pandemic, and R185m for strategic projects.
The effect of load-shedding on operations has been contained, with most hospitals having full island capacity, referring to their ability to operate independently of the grid. The group has also implemented uninterrupted power supply systems and has 200 backup diesel generators. However, diesel costs increased by R41m in the period.
The healthcare group has invested in installing a sizeable solar power base across 72 sites, capable of generating 18-20 gigawatts a year.
Netcare and other public and private hospitals have faced a crisis for more than a decade in struggling to recruit specialist nurses in areas such as intensive care, emergency care and oncology.
The group says it is collaborating with stakeholders and regulatory bodies to address the nursing skills deficit while attracting a net 43 doctors during the review period.
While up 8.36% for the week, Netcare’s share price ended 0.47% lower on Friday at R14.81.
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