Life Healthcare plans to bring skills back home with its radiology project

Private hospital operator, Life Healthcare, recently reported an 11.9% drop in headline earnings per share, accompanied by a 4% increase in revenue. The company attributed the decline in earnings before interest, taxes, depreciation, and amortization to lower activity levels and increased COVID-19 related operating costs. In an interview with CNBC Africa, Life Healthcare CEO, Peter Wharton-Hood, delved into the performance of the company's offshore operations and plans to bring skills back home with a significant investment in a radiology project in South Africa. Wharton-Hood highlighted the outstanding performance of the company's offshore operations, particularly in the AMG business, which works closely with governments in England, Italy, and Ireland. He emphasized the success of the diversification strategy in terms of geography and services beyond hospital settings. The COVID-19 pandemic presented an opportunity for Life Healthcare as the NHS sought additional services to address backlogs, indicating potential growth opportunities in the UK where approximately 5 million patients are awaiting scans. Despite the overall group revenue increasing by 4%, the southern Africa business experienced a decline of 3.4%. Wharton-Hood acknowledged the challenges posed by the unpredictable nature of the pandemic waves on hospital operations' pace of recovery in the region. However, he noted a sequential improvement in southern African operations post the second wave, with current hospital occupancies at around 61%. One of the significant developments for Life Healthcare was the disposal of a scan made in Poland for 681 million rand, which was utilized to reduce debt levels. While focusing on optimizing the current asset portfolio, the company aims to embark on an expansionary strategy, particularly highlighting the South African Radiology project awaiting regulatory approvals. The South African Radiology project anticipates a substantial investment of 500 to 700 million rand within the first 12 months, with potential scaling to a three-billion-rand project. This endeavor not only signifies a strategic move for the company but also aligns with its objective of bringing skills back to the South African market. Regarding the management of COVID-19 waves and its impact on operations, Wharton-Hood emphasized the importance of decentralized decision-making at the hospital level. Drawing from learnings of the first wave, where blanket decisions were made, the company transitioned to a more localized approach in wave two, resulting in more efficient network management. A sense of teamwork and knowledge sharing among frontline workers further contributed to enhancing operational effectiveness. As Life Healthcare actively participates in the vaccination rollout in South Africa, the company has volunteered 22 hospitals as vaccination sites, aiming to deliver 6,000 vaccinations per day in the initial phase. With approximately 14,000 vaccine doses allocated across 12 hospitals, the company is progressively scaling up its vaccination efforts to contribute to the nationwide initiative. In conclusion, Life Healthcare's focus on leveraging offshore operations, pursuing strategic investments in South Africa, and actively engaging in the COVID-19 vaccine rollout underscores its commitment to growth, innovation, and community welfare.