Netcare delivers strong results in 2025 amidst ongoing digital innovation in its wards

Netcare generated a solid financial performance that highlights adaptability and commitment to digital transformation in its year to September 30, 2025.

There was a notable increase in revenue and operating profit, underscoring resilient demand for private healthcare services in South Africa. Group revenue escalated by 4.5% to R26.34 billion.

Additionally, normalised earnings before interest, tax, depreciation, and amortisation (EBITDA) saw an impressive improvement of 8.4%, rising to R4.91bn. These results reflect strong operational leverage, with an EBITDA margin gain of 60 basis points, climbing from 18% to 18.6%.

Dr Richard Friedland, Netcare’s CEO, attributed the positive results to heightened activity levels, ongoing benefits from digitisation, and lower costs from the completion of specific projects.

“These pleasing results have been achieved, notwithstanding a challenging macroeconomic and competitive landscape. Our performance was underpinned by resilient demand for private healthcare services,” he said.

Cash generated from operations also saw good growth, increasing to R5.47bn from R4.37bn, with a cash conversion ratio of 111.3%, marking a significant rise from the previous year’s 96.5%. This fiscal health enabled Netcare to continue its share buybacks, with R855m allocated for repurchasing 64.2 million ordinary shares at an average price of 1,324 cents per share.

A final dividend of 49 cents per share was declared. This, combined with an interim dividend of 36 cents, resulted in a total annual dividend of 85 cents, reflecting a 21.4% increase over the previous year.

The operational performance was equally robust, with an increase in total paid patient days (PPD) by 0.7%. The Hospital and Emergency Services segment posted a revenue increase of 4.9% to R25.70bn, alongside an 11.3% growth in operating profit.

Surgical cases remain a significant revenue contributor, consistently accounting for over 70% of total revenue. The digital transformation initiative had begun to bear fruit, as indicated by substantial cash savings and operational efficiencies, said Dr Friedland.

“We are also excited to announce the imminent rollout of wearable devices for all patients in general wards,” Dr Friedland said.

This project aims to enhance patient monitoring, improve safety, and refine clinical outcomes through continuous health data collection. The devices offer continuous clinical-grade monitoring of all key vital signs 24 hours a day, including heart rate, respiratory rate, core temperature, oxygen saturation, and, uniquely, blood pressure.

Netcare is pursuing a ten-year strategy to solidify its position as a leading healthcare provider. This plan integrates three global healthcare trends—customer centricity, digitisation, and data-driven care—designed to foster a connected and responsive healthcare environment.

“Following the successful completion of the ‘Digitally Enabled’ first phase in 2024, which fully digitised the group’s ecosystem and implemented our EMR system, we have established a robust foundation for the next exciting wave of innovation,” Dr Friedland said.

Total capex in the past year, including strategic projects, amounted to R1.6bn for the year, of which R288m related to expansionary projects.

Although the case mix was more complex than before the COVID-19 pandemic, the overall acute length of stay remained flat at 4.5 days, reflecting a higher proportion of less severe admissions and a milder flu season. Increased activity levels resulted in an improvement in acute occupancy to 65% from 64.3% in the 2024 year.

Dr Friedland emphasised the necessity for continued engagement and collaboration with the public and private sectors to create sustainable healthcare solutions in South Africa, despite legal proceedings that were underway against the government's proposed National Health Insurance scheme.

BUSINESS REPORT