NETCARE: 1,867 +27 (+1.47%)
South Africa's Life Healthcare warns on earnings after disposal
(Adds shares, details)
JOHANNESBURG, April 24 (Reuters) - South Africa's Life
Healthcare said on Wednesday half-year earnings could
fall as much as 55 percent due to costs related to the disposal
of its stake in India's Max Healthcare, impairments
and other investments.
Shares in the company fell 5.30 percent to 26.27 rand after
the private hospital operator predicted headline earnings per
share (HEPS) for the six months ended March 31 of between 24.1
cents and 29.5 cents, down from 53.7 cents a year earlier.
HEPS is the main profit measure used in South Africa and
strips out certain one-off items.
In September, Life Healthcare said it would sell its 49.7
percent stake in Max Healthcare to KKR-backed Radiant
Life Care Pvt Ltd for 4.3 billion rand ($300 million).
Life Healthcare also cited a 256 million rand
marked-to-market valuation loss related to the disposal, as one
of the factors impacting HEPS, along with an increase in
contingent consideration relating to past company acquisitions.
Marked-to-market accounting is a way of valuing assets based
on how much they could sell for under current market conditions.
Group revenue is expected to rise by between 8.6 percent and
10.4 percent, while normalised earnings before interest, tax,
depreciation and amortization (EBITDA) will increase as much as
Life Healthcare competes with listed rivals Mediclinic
International and Netcare Ltd.
Last Wednesday Mediclinic hit a more than three-month high
on after it reassured investors with a forecast for net profit
that was in line with market expectations despite a tough
($1 = 14.3247 rand)
(Reporting by Nqobile Dludla; editing by Jason Neely and Elaine
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