Mediclinic Covid-19 Update

On Friday morning, Mediclinic released a trading update for their financial year ended March 2020. As is the case with all other companies reporting at the moment, investors care more about the impact of Covid-19 on the business, than what they have achieved over the last year.

In the case of Mediclinic, the company notes that suspending elective surgeries will have a significant negative impact on their business. Part of that impact will be mitigated by an increase in activity from Covid-19 cases, but on the whole, the group will be negatively impacted. To be conservative, management has decided to suspend their dividend until things clear up globally.



Here is a quick run through of how each division performed. Their Hirslanden operations performed ahead of expectations, as they adapt to a new regulatory environment in Switzerland. The South African activities were flat and in line with expectations. The Middle East operations have seen growth thanks to their new hospitals in the region. Going forward, growth in the Middle East might slow a bit due to low oil prices.

Even though the group will be negatively impacted by this shutdown, they are still able to stay open, which is better than many other businesses. They are also fortunate that all the delayed surgeries, will be back on the books once the lockdown is over. We will have more detailed numbers when they are released to the market at the end of May.