Netcare defends healthy earnings

The increase in profit comes at a time when government seeks greater intervention.

The increase in profit comes at a time when government seeks greater intervention. Picture: Reinart Toerien/EWN.

JOHANNESBURG - Private hospital group Netcare Ltd on Monday defended its 25 percent rise in full-year profit, saying the industry is not overcharging patients but that demand has risen.

The company says adjusted headline earnings per share totalled 142 cents in year to end-September compared with 113.2 cents a year earlier while revenue rose 10.4 percent to R27.8 billion.

The increase was largely helped by its core South African business, thanks to a fast-growing middle class, while faltering economic growth in the United Kingdom led to a drop in the number of Britons with private medical insurance.

The hike also comes at a time when government is seeking greater intervention when it comes to pricing as well as a probe by the Competition Commission of South Africa.

Netcare Chief Executive Officer (CEO) Richard Friedland downplayed claims the local private medical industry is in disproportionately great shape.

"I wouldn't necessarily say that. What we are seeing is an increased demand for private healthcare services."

Friedland says he's hoping the inquiry will be both objective and impartial.

The inquiry, which is due to start work in January, will probe factors driving healthcare costs and expenditure.

The commission will look at the private market as a whole, which is dominated by three companies - Netcare, Life and Mediclinic.