Mediclinic upbeat about Middle East turnaround
Global private hospital group Mediclinic (MDC) is more optimistic about its struggling Middle East division. The firm has also dodged a proposed tax levy in Switzerland.
On 10 April the canton of Zurich, a federal state of Switzerland, rejected a proposed levy on the proportion of privately insured patients treated in listed hospitals, which included Mediclinic’s Klinik Hirslanden.
The Switzerland division represents approximately 50% of earnings and the annual CHF34m levy would have hit 2017 earnings by 10% according to analysts.
It’s welcome news for Mediclinic after its Middle East division suffered in 2016 thanks to regulatory changes. From 1 July 2016, United Arab Emirates citizens lost access to free healthcare in Abu Dhabi and had to make a 20% co-payment if they visited a private hospital. This saw full year March 2017 revenue from this part of the business fall by 8% year-on-year.
Investec analyst Cora McCallum also says a slower than expected ramp up in patients is taking its toll as new doctors are taking time to establish their reputation and build a practice.
Despite the challenging environment, management is upbeat about the division’s fortunes improving throughout its 2018 financial year. Margins are also anticipated to be ahead of previous guidance at up to 11.5%. (LMJ)
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell Youinvest.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
Story In Numbers
- Most Popular Investment Trusts
- Most Popular Funds
- 255: WH Smith’s ever-increasing overseas exposure
- Zero: Hunting cannot provide earnings guidance
- Have UK employment levels peaked?
- Record ETF flows in the first quarter of 2017
- 76,230: Tesla largest US car maker by market cap
- 10 bagger: London Stock Exchange