Mediclinic pulls dividend; sees hit from surgery cancellations

International private healthcare group Mediclinic pulled its dividend and said the cancellation of non-elective surgery due to the coronavirus pandemic would hit full year earnings.

The company said the impact would be offset by its response to the crisis and ongoing provision of primary and acute care services. It added that it had decided to preserve liquidity by suspending all non-essential capital expenditure, and cancelling executive pay rises.

Loan covenant test waivers had been agreed for material borrowings across all three of its divisions up to and including March 2021.

"This allows the group to focus on the vital role it plays during the pandemic and to prepare for the anticipated increase in demand from postponed treatments once the peak of the pandemic subsides," Mediclinic said in a statement.

Mediclinic, which operates in Switzerland, South Africa, Namibia and the United Arab Emirates, said full year trading was broadly in line with expectations and it had a strong financial position and liquidity entering pandemic.

Revenue for the year to March 3 was expected to grow 5.5%, while pre-IFRS16 earnings before interest, tax, depreciation and amortisation (EBITDA) would fall by 2.5%. On a constant currency basis revenue was up 4% and EBITDA down 3.5%.