Half-Yearly Performance Overview: January to March 2024

Life Healthcare Group (LHG) has reported robust operating performance for the six-month period ending on March 31, 2024, with group revenue from continuing operations increasing by 7.8% to R11.7 billion. This growth was primarily driven by strong activity in southern Africa. Normalized earnings per share (NEPS) rose by 8.4% to 44.1 cents, compared to 40.7 cents in the first half of 2023.

During this period, the Group completed the disposal of Alliance Medical Group (AMG), resulting in net cash proceeds of R10.2 billion after settling all offshore debt and transaction costs. In April 2024, a special dividend of R8.8 billion was paid from the proceeds.

Peter Wharton-Hood, Chief Executive Officer, commented, “With the successful sale of AMG, our Group now has the lowest gearing in its history, positioning us on a solid financial foundation. This enables us to focus on the continued growth of our southern African business.”

The Group’s operations in South Africa experienced strong demand, driven by preferred provider network arrangements with major medical schemes. This led to higher utilization and a weighted average occupancy level of 66.6% during the first half of 2024, up from 65.9% in the prior period. While revenue in South Africa grew by 5.9%, normalized EBITDA margin decreased to 15.7% from 17.4% in the first half of 2023. However, improvements in normalized EBITDA margin have been observed in the second quarter of 2024, with the margin exceeding 17%.

As part of its strategy to grow the non-acute segment of the business, LHG completed the acquisition of 43 Fresenius Medical Care renal dialysis units and expanded its imaging footprint with the acquisition of additional imaging equipment. Adam Pyle, Chief Strategy and Growth Officer, expressed excitement about the underlying growth in non-acute businesses and the positive impact on patient-centered care.

LHG’s subsidiary, LMI, reported a 77.5% year-on-year revenue growth, driven by increased sales of Neuraceq® doses in the USA. Additionally, renal dialysis treatments reached a record high of 103,971 during the first half of 2024, supported by increased adoption of integrated renal care products.

In financial terms, total earnings per share (EPS) increased significantly to 242.8 cents, mainly due to a once-off gain of R2.8 billion following the completion of the AMG disposal. Total headline earnings per share (HEPS) also increased by 63.0% to 65.2 cents. The Group ended the period in a net cash position due to the proceeds from the sale of AMG.

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