Life Healthcare reports strong earnings, declares interim dividend

Life Healthcare, a leading private hospital group, has reported a 4% increase in revenue for the six months ending in March, bolstered by improving demand and occupancy rates. However, earnings per share from continuing operations experienced a 16.8% decline. In a recent interview with CNBC Africa, Life Healthcare CEO Peter Wharton-Hood shed light on the operating environment the company faced during this period. Wharton-Hood highlighted the challenges encountered in the first quarter, marked by the dual impact of two COVID waves, which led to a decrease in elective surgeries and hospital occupancy rates. He noted that while the first quarter was challenging, the second quarter witnessed a significant improvement in occupancy rates, with levels rising from 54% to 67% by the end of March. Wharton-Hood described the operating conditions as a tale of two stories, with domestic and international markets displaying distinct trends. Internationally, there was a surge in demand for services, with Ireland showing a 26% increase in volumes and the UK experiencing a 13.5% rise. These positive developments indicate a gradual return to pre-COVID levels. The increase in occupancy rates was attributed to the return of elective surgeries as societies adapted to managing the pandemic. Wharton-Hood emphasized that the recent COVID wave presented fewer severe cases, resulting in a resurgence of medical procedures alongside surgical interventions. He highlighted the significance of striking a balance between addressing delayed surgeries from previous waves and accommodating new elective procedures. The CEO elaborated on the various regions in which Life Healthcare operates, emphasizing the deliberate efforts of governments in Italy, the UK, and Ireland to address diagnostic backlogs. Wharton-Hood underscored the company's role as a preferred partner in addressing these backlogs, leading to increased demand for services like CT scans, MRIs, and PET CT across the regions. In South Africa, the company witnessed a rise in elective cases and a more balanced mix of medical and surgical cases. While discussing the sustainability of the current trend towards elective surgeries, Wharton-Hood acknowledged the ongoing uncertainty in the global health landscape. He highlighted the positive indicators within the Life Healthcare group, such as a notable decline in hospitalizations and in-hospital fatality rates related to COVID. This decline in acuity and fatality rates reflects a higher level of immunity in society, driven by extensive vaccination efforts and responsible behavioral practices. Wharton-Hood expressed confidence in society's ability to coexist with COVID in an endemic state, rather than facing repeated shutdowns. He reassured viewers about the company's capacity to manage various disease types, including highly infectious diseases like monkeypox, citing the healthcare industry's longstanding expertise in addressing communicable diseases. The CEO's optimistic outlook and the company's resilient performance indicate a promising outlook for Life Healthcare amid the evolving healthcare landscape.