Profits of Netcare higher as pandemic raises

South African private hospital group Netcare Ltd said on Tuesday its core earnings halved for the 11 months to September due to fewer patient visits and costs related to hospital services during COVID-19 lockdowns.

The company said its earnings before income tax depreciation and amortization (EBITDA) slumped by 50.8% during the period, while group revenue fell 12.9%.

“The most severe impact of COVID-19 was experienced in April 2020 during South Africa’s national Level 5 lockdown, which adversely affected non-urgent surgery and medical and trauma cases,” Netcare said.

Services for respiratory cases, emergency and trauma admissions fell sharply during various stages and degrees of curbs in South Africa, which affected footfall and its service mix, the company said.

However, spending on strategic projects continued during the period and Netcare said its total spend for 2020 would be about 1 billion rand ($58 million), hitting its margins.

The company said its EBITDA margin was also pressured by additional costs of 219 million rand to adapt to disruptions caused by the pandemic.