The group said paid patient days (PPD) in the acute hospital sector grew by 1.6%, while PPD in complementary businesses declined by 2.6%, leading to an overall increase of 1.2% and an improved revenue per PPD in the second half of the year. File photo
Life Healthcare, South Africa’s second-largest private hospital group, anticipates a substantial earnings boost for the financial year ending September 30, 2024, it said in a trading update yesterday.
Investors can look forward to the annual results set for release on November 26, showing headline earnings per share (HEPS) from both continuing and discontinued operations expected to rise between 69.4% and 77.3%, or from 149.4 cents to 156.4c.
Furthermore, earnings per share (EPS) from continuing and discontinued operations are projected to increase by 328.0c to 329.5c, reflecting a whopping 1 000% rise.
This was bolstered by a one-off gain of R2.8 billion from the sale of Alliance Medical Group (AMG), contrasting sharply with a R990 million impairment loss reported in 2023.
Following the sale, Life Healthcare received R10.2bn in net cash proceeds, used to settle offshore debt and transaction costs, with an R8.8bn special dividend paid on April 8, 2024. The group also saw a 66% reduction in net interest costs, or R360m, due to the repayment of international debt and a strong positive cash balance since February.
In addition there was a fair value adjustment of R60m on Life Molecular Imaging (LMI), reflecting improved growth expectations for its product portfolio, particularly the RM2 product, which generated $36 million (around R430m) through a sub-licensing arrangement.
There was also the recognition of approximately R150m in previously unclaimed deferred tax losses at LMI, further enhancing earnings.
The company also expects strong growth in its EPS from continuing operations, which was expected to rise to between 135.1c and 139.5c, an increase of 55.3% to 60.3%.
Similarly, headline EPS from continuing operations is projected to increase to between 136.4c and 140.8c, reflecting growth of 55.9% to 60.9%. Meanwhile, normalised EPS from continuing operations is forecast at 128.9c to 133.4c, marking a 44.7% to 49.7% rise.
Life Healthcare also reported a robust operational performance.
Group revenue from continuing operations increased by 12% to 13%, with revenue growth in Southern Africa of 7.5% to 7.9%, and LMI revenue soaring by approximately 180% in rand terms.
Paid patient days (PPD) in the acute hospital sector grew by 1.6%, while PPD in complementary businesses declined by 2.6%, leading to an overall increase of 1.2% and an improved revenue per PPD in the second half of the year.
Sales of LMI’s Neuraceq doses rose by 90% compared to the prior year.
Additionally, Life Healthcare said the group normalised Ebitda from continuing operations increased between 19.0% and 20.5%, driven by the RM2 gain, which contributed approximately R580m net of costs.
By 1.30pm the shares on the JSE were up 1.96% at R17.16, with the share up 55.69% in the past six months.
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