Mediclinic losses widen on weak Swiss performance

Private hospital group Mediclinic posted a widening of its interim losses on Thursday on the back of a weak performance in Switzerland.

In the six months to 30 September, the company's pre-tax loss widened to £150m from £10m the year before, reflecting a non-cash impairment charge on its equity investment in Spire and impairment charges from its Swiss subsidiary, Hirslanden, which accounts for 46% of group revenues.

Group revenue in the period was down 1% to £1.387bn as growth in South Africa and the Middle East was offset by a weak performance in Switzerland, and earnings before interest, taxes, depreciation and amortisation fell 8% to £213m.

Mediclinic maintained its interim dividend at 3.2p a share.

Chief executive officer Ronnie van der Merwe said: "The group's first half financial results were disappointing. The poor performance in Switzerland more than outweighed the revenue growth and margin expansion delivered by the Southern Africa and Middle East divisions.

"The rapidly implemented regulatory changes regarding outpatient tariff adjustments and outmigration of care in Switzerland are significantly impacting the healthcare market in that country. We are acutely focused on adapting Hirslanden to reflect the future healthcare environment in Switzerland. Steps have been taken to improve the current financial performance through securing revenue growth, reducing costs and driving efficiency savings in different areas of the business. These, together with customary seasonal benefits, are expected to support the delivery of improved performance in the second half."

At 0950 GMT, the shares were down 2.2% to 347.50p.