November 19, 2018 / 7:14 AM / a year ago

UPDATE 1-S.Africa's Netcare to pay special dividend, FY earnings inch up

(Adds details, shares)

JOHANNESBURG, Nov 19 (Reuters) - South Africa’s second-largest private hospital firm Netcare Ltd announced on Monday a special dividend payout of 40 cents per share after reporting a marginal rise in full-year earnings.

Adjusted headline earnings per share inched up to 171.6 cents for the year ended September, compared with 170.6 cents the previous year. Headline EPS is the main profit measure in South Africa and strips out certain one-off items.

Shares of Netcare rose 4.03 percent to 25.79 rand in early trading.

Netcare’s 2018 financial year has been characterised by significant changes to the group’s operational profile.

In South Africa, it secured competition approval for its acquisition of Akeso Clinics, a mental healthcare provider, while in the UK, it made a strategic decision to exit the market and dispose of its interests in BMI Healthcare and GHG PropCo 2.

“Netcare’s disposal plan continues although no transaction has yet been concluded,” it said in its results booklet.

Netcare said it booked a non-cash impairment of 1.3 billion rand ($92.52 million) against the carrying value of its contractual economic interest in the debt of Britain’s BMI Healthcare.

Normalised group earnings before interest, tax, depreciation and amortisation (EBITDA) increased 5.9 percent to 4.2 billion rand, while the EBITDA margin edged lower to 20.3 percent from 20.8 percent.

Netcare’s hospital and emergency services division registered a 5.9 percent rise in patient days, which represent customer stays in its hospitals.

“Based on the performance of patient days over the last quarter of FY2018, acute patient day growth is expected to remain under pressure in the near term,” the firm said.

Demand for mental health is expected to remain strong, benefiting from the inclusion of Akeso for a full 12 months, the company said.

The firm declared a final dividend of 60 cents per share, up 5.3 percent.

Reporting by Nqobile Dludla; Editing by Amrutha Gayathri

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