Call a doctor: Private hospital operator Mediclinic shares nosedive after earnings fall
Shares in private hospital operator Mediclinic have nosedived after the company warned its earnings were under pressure.
The company lost close to a fifth of its value after its Swiss subsidiary Hirslanden was hit by “weaker than expected growth” in admissions and a higher proportion of insured patients.
Underlying earnings for the six months to the end of September were down eight per cent to £210m from the previous year's £231m.
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Hirslanden, which operates 17 private hospitals and four clinics in Switzerland, dropped its revenue by about 1.5 per cent in the first half of the financial year.
Mediclinic, which has a 29.9 per cent stake in UK private hospital firm Spire Healthcare, saw more than £645m wiped off its value in morning trading on Wednesday with shares down more than 17 per cent.
Spire Healthcare had previously reported “disappointing” results after NHS spending cuts hit profits in the first half of FY19.
The NHS had been using private firms, such as Spire, to make up for and bed and staffing shortages.
But Mediclinic's share of profit in Spire rose from £1.1m to £1.8m.
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Mediclinic said its trading experienced “customary seasonality” in Switzerland and the Middle East, where it opened a new 182-bed hospital in Dubai in September.
Chief executive Ronnie van der Merwe said: “In Switzerland, the business continues to adapt to recent regulatory changes in the outpatient environment, which in the period had a greater than expected impact on admissions and the insurance mix.”