MDC - MEDICLINIC INTERNATIONAL LIMITED - Unaudited interim group results for the six months ended 30 September 2015 and declaration of cash dividend

12/11/2015

Unaudited interim group results for the six months ended 30 September 2015 and declaration of cash dividend

MEDICLINIC INTERNATIONAL LIMITED       
Incorporated in the Republic of South Africa 
Registration number: 1983/010725/06 
Income tax no: 9950122714
Share code: MDC 
NSX share code: MCI
ISIN share code: ZAE000074142 
("Mediclinic" or "the Company")

UNAUDITED INTERIM GROUP RESULTS OF MEDICLINIC INTERNATIONAL LIMITED 
AND ITS SUBSIDIARIES FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2015
AND DECLARATION OF CASH DIVIDEND


Strong half-year results with good growth in all regions

Financial highlights

· Normalised revenue increased by 16% to R19 565m (2014: R16 828m)
· Normalised EBITDA increased by 16% to R3 850m (2014: R3 329m)
· Adjusted* basic normalised headline earnings per share increased by 19% to 214.1 cents
· Margins stable at 19.7%
· Cash and cash equivalents at period end were R5 733m, an increase of 20% (31 March 2015: R4 779m)
· Interim dividend per ordinary share increased by 16% to 36.0 cents (2014: 31.0 cents)


Operational and corporate highlights

•  Total investment in capital projects and new equipment of R1 484m, across all three operating platforms

•  Successful R10bn rights issue and acquisition of 29.9% in Spire Healthcare Group plc, a leading provider 
   of private healthcare, with 39 private hospitals throughout the UK

•  On 14 October 2015, the proposed combination of Mediclinic and Al Noor Hospitals Group plc, a private 
   healthcare provider primarily in the emirate of Abu Dhabi and listed on the London Stock Exchange, 
   was announced. The proposed combination remains subject to various conditions, including Mediclinic 
   and Al Noor shareholder approval

•  Implemented restructuring of Mpilo 1 Investment Holdings ("BEE empowerment transaction") with lock-in
   period extended to December 2019

Danie Meintjes, CEO of Mediclinic International, commented:

"We are pleased to announce a strong set of interim results, with revenue and profits demonstrating the 
success of our strategy.

The Group continues to deliver against its key performance indicators with high levels of cash generation, 
growth in patient activity, stable margins and effective cost control. This is against a market backdrop of 
increasing demand for our services providing geographic expansion opportunities. With both a strengthened 
balance sheet via a successful rights issue, and capital investments made during the period, Mediclinic 
remains well positioned for future growth."


 CONSOLIDATED SUMMARISED STATEMENT OF FINANCIAL POSITION

                                                       Unaudited             Unaudited               Audited
                                                           as at                 as at                 as at
                                                       30/9/2015             30/9/2014             31/3/2015
                                                         R'm                   R'm                   R'm
ASSETS
Non-current assets                                        83 656                60 836                65 813
 Property, equipment and vehicles                         60 750                49 620                53 776
 Intangible assets                                        13 050          10 787                11 565
 Investments in associates                                 9 377                     3                     2
 Investment in joint venture                                  63                    65                    65
 Other investments and loans                                  76                    67                    93
 Derivative financial instruments                             9                    16                    10
 Deferred income tax assets                                  331                   278                   302

Current assets                                            15 639                12 307                13 366
 Inventories                                               1 170                   972                 1 074
 Trade and other receivables                               8 682                 6 521                 7 479
 Current income tax assets                                    54                    66                    34
 Cash and cash equivalents                                 5 733                 4 748                 4 779

Total assets                                              99 295           73 143                79 179

EQUITY AND LIABILITIES
Total equity                                              48 994                29 335                33 162
 Share capital and reserves                               47 902                28 374                32 064
 Non-controlling interests                                 1 092                   961                 1 098

LIABILITIES
Non-current liabilities                                   42 154                35 707                38 078
 Borrowings                                               30 273                27 202                27 927
 Deferred income tax liabilities                           8 810                 7 312                 7 729
 Retirement benefit obligations                            1 823              523                 1 292
 Provisions                                                  788                   544                   665
 Derivative financial instruments                            460                   126                   465

Current liabilities                                        8 147                 8 101                 7 939
 Trade and other payables                           6 248                 4 957                 6 032
 Borrowings                                                1 136                 1 705                 1 229
 Provisions                                                  533                   465                   429
 Derivative financial instruments                              7                     ­                    21
 Current income tax liabilities                              223                   974                   228
Total liabilities                                         50 301                43 808                46 017
Total equity and liabilities                              99 295                73 143                79 179

Net asset value per ordinary share ­ cents               4 961.1           3 321.4               3 752.5


CONSOLIDATED SUMMARISED INCOME STATEMENT

                                                       Unaudited             Unaudited
                                                        6 months              6 months               Audited
                                                              to                    to               year to
                                    Notes    30/9/2015   Increase  30/9/2014             31/3/2015
                                                             R'm          %       R'm                    R'm

Revenue                                                   19 565        16%     16 828                35 238
Cost of sales                                            (11 224)               (9 742)              (19 887)
Administration and other operating expenses               (4 488)               (3 784)               (8 116)
Operating profit before depreciation(EBITDA)      1        3 853        17%      3 302                 7 235
Depreciation and amortisation                               (860)                 (723)               (1 512)
Operating profit                2 993                 2 579                 5 723
Other gains and losses                            2           57                   190                    93
Income from associates                                         ­                     ­                     2
Income from joint venture                                     (2)                   (2)                   (1)
Finance income                                                75                    52                   103
Finance cost                                      3         (616)                 (602)               (1 179)
Profit before tax                                          2 507                 2 217                 4 741
Income tax expense                                          (498)    (428)                 (206)
Profit for the period                                      2 009                 1 789                 4 535

Attributable to:
Equity holders of the Company                              1 868                 1 668                 4 297
Non-controlling interests                                    141                   121                   238
                                    2 009                 1 789                 4 535


                                                          Number                Number                Number
PER SHARE PERFORMANCE                                       '000                  '000                  '000
Weighted average number of shares
 Number of shares net of treasury shares                 852 892               810 384               810 878
 Rights issue                                             11 263                     ­                     ­
 Accelarated bookbuild offering                                ­                11 458                31 901
 Adjustment for Right Offer (IAS33 para 26)                8 407                21 017                21 017
 Adjustment for accelarated bookbuilding                       -
 offering (IAS33 para 26)                                                          606                   606
Weighted average number of ordinary
 shares in issue                                         872 562               843 465               864 402
Diluted weighted average number of shares
 Weighted average number of shares.                      872 562               843 465               864 402
 Adjustment for dilutive treasury shares                  14 888                16 561                15 932

 Diluted weighted average number of
 ordinary shares in issue                                887 449               860 026               880 334

Earnings per ordinary share                                cents                 cents     cents
 ­ Basic earnings basis                                    214.1         8%      197.8                 497.1
 ­ Diluted earnings basis                                  210.5                 193.9                 488.1
 ­ Basic headline earnings basis                           213.8        16%      184.4                 472.1
 ­ Diluted headline earnings basis                         210.2                 180.8                 463.6
 ­ Adjusted basic normalised headline earnings basis       214.1        19%      180.6                 398.3
 ­ Adjusted diluted normalised headline earnings basis     210.5                 177.1                 391.1

Dividends per ordinary share
­ interim                                                   36.0                  31.0                  31.0 
­ final                                                      n/a                   n/a                  75.5

EARNINGS RECONCILIATION                                      R'm                   R'm                   R'm

Profit attributable to shareholders                        1 868        12%      1 668                  4 297
 Re-measurements for headline earnings                        (3)                 (131)                 (248)
 Profit on sale of property, equipment and vehicles           (3)                   (4)                  (87)
 Impairment of property                                        ­                    31                    31
 Insurance proceeds                                            ­                  (158)                 (158)
 Gain on disposal of subsidiary                                ­                     ­                   (34)
 Income tax effects                                            ­                    18                    32
Headline earnings                                          1 865        20%      1 555                 4 081
 Re-measurements for normalised headline earnings            (57)                  (32)      (613)
 Realised gain on foreign currency forward contracts           ­                   (32)                  (32)
 Ineffective cash flow hedges                                (57)                    ­                   342
 Swiss tax charges relating to prior years                     ­                     ­                  (712)
 Discount on repayment of loan    ­                     ­                  (211)
 Income tax effects                                           12                     ­                   (25)
 Normalised headline earnings                              1 820        20%      1 523                 3 443
 

CONSOLIDATED SUMMARISED STATEMENT OF COMPREHENSIVE INCOME

                                                       Unaudited         Unaudited
                                                        6 months              6 months               Audited
                                                              to                    to               year to
                                                       30/9/2015   Increase  30/9/2014             31/3/2015
       R'm          %        R'm                   R'm
 
Profit for the period                                      2 009        12%      1 789                 4 535
Other comprehensive income
Items that may be reclassified to the income statement
Currency translation differences                           4 933                  (204)                1 643
Fair value adjustment to cash flow hedges (net of tax)        23                  (102)                  (94)

Items that may not be reclassified to the 
income statement
Actuarial gains and losses                                  (280)                    2                  (561)
Other comprehensive income, net of tax                     4 676                  (304)                  988

Total comprehensive income for the period       6 685                 1 485                 5 523

Attributable to:
Equity holders of the Company                              6 543                 1 364                 5 287
Non-controlling interests                                    142                   121                   236

                                                           6 685                 1 485                 5 523


CONSOLIDATED SUMMARISED STATEMENT OF CHANGES IN EQUITY

                                                       Unaudited             Unaudited            
                                                        6 months              6 months               Audited
                                                              to                    to               year to
                                 30/9/2015             30/9/2014             31/3/2015
                                                             R'm                   R'm                   R'm

Opening balance                                           33 162                25 391                25 391
Shares issued                                             10 000                 3 178         3 178
Share issue costs                                            (90)                  (64)                  (64)
Movement in shares held in treasury                          (17)                  (20)                  (16)
Movement in share-based payment reserve                       12                    11                    24
Increase in non-controlling interests     (30)                   12                    62
Total comprehensive income for the period                  6 685                 1 485                 5 523
Transactions with non-controlling shareholders                (5)                    1                     9
Distributed to shareholders                                 (605)                 (564)                 (822)
Distributed to non-controlling interests                    (118)                  (95)                 (123)
Closing balance                                           48 994                29 335                33 162

Comprising
Share capital                                             24 051                14 141                14 141
Treasury shares                                             (282)                 (269)                 (265)
Share-based payment reserve                                  195                   170                   183
Foreign currency translation reserve                      15 772                 8 994                10 840
Hedge reserve                                                (62)                  (93)                  (85)
Retained earnings                  8 228                 5 431                 7 250
Shareholders' equity                                      47 902                28 374                32 064
Non-controlling interests                                  1 092                   961                 1 098
Total equity                                              48 994                29 335                33 162


CONSOLIDATED SUMMARISED STATEMENT OF CASH FLOWS

                                                       Unaudited             Unaudited
                                                        6 months              6 months               Audited
                                                              to                    to               year to
                                           Notes      30/9/2015             30/9/2014             31/3/2015
                                                             R'm                   R'm                   R'm

Cash flow from operating activities                        2 383                 2 726                 6 008
 Cash generated from operations                            3 259                 3 692                 7 848
 Net finance cost                                           (439)                 (455)                 (916)
 Taxation paid                                              (437)                 (511)                 (924)

Cash flow from investment activities                     (10 131)               (2 386)               (4 594)
 Investment to maintain operations                          (483)                 (377)               (1 215)
 Investment to expand operations                          (1 001)                 (711)               (2 214)
 Business combinations                         8               ­                (1 440)               (1 446)
 Proceeds on disposal of property,
 equipment and vehicles                                       11                     7                    98
 Disposal of subsidiary                                        ­                     ­                    45
 Insurance proceeds                                            ­                   134                   158
 Loan repaid/(advanced)                                       20                     ­                   (25)
 Proceeds from other investments and loans                     ­      1                     5
 Investment in associate                       9          (8 678)                    ­                     ­

Cash flow from financing activities                        8 287                   876                  (361)
 Proceeds from shares issued                              10 000                 3 178                 3 178
 Share issue costs                    (89)                 (64)                   (64)
 Distributions to shareholders                              (605)                 (564)                 (822)
 Distributions to non-controlling interests                 (118)                  (95)                 (123)
 Proceeds from borrowings                                      ­                     5                 4 982
 Repayment of borrowings                                    (835)               (1 577)               (7 443)
 Proceeds from disposal of treasury shares                     4                     2                     5
 Treasury shares purchased                                   (22)                  (22)                  (22)
 Acquisition of non-controlling interests                    (34)            ­                     ­
 Proceeds on disposal of non-controlling 
 interests                                                     ­                     ­                     ­
 Refinancing transaction costs                               (14)                    ­                  (125)
 Proceeds on disposal of non-controlling 
 interest                                                      ­                    13                    73

Net movement in cash and cash equivalents                    539                 1 216                 1 053
Opening balance of cash and cash equivalents               4 779                 3 485                 3 485
Exchange rate fluctuations on foreign cash                   415                    47                   241
Closing balance of cash and cash equivalents               5 733                 4 748                 4 779

                                                         

SUMMARISED SEGMENTAL REPORTS

                                                       Unaudited             Unaudited
                                                        6 months              6 months               Audited
                                 to                    to               year to
                                                       30/9/2015             30/9/2014             31/3/2015
                                                             R'm                   R'm                   R'm

Revenue
 Southern Africa                                           6 759                 6 206         12 323
 Switzerland                                              10 310                 8 646                18 610
 Middle East                                               2 496                 1 976                 4 305


                                                          19 565                16 828                35 238


EBITDA
 Southern Africa             1 460                 1 303                 2 676
 Switzerland                                               1 871                 1 609                 3 619
 Middle East                                                 522                   390                   940


                                                           3 853                 3 302                 7 235

Operating profit
 Southern Africa                                           1 247                 1 120                 2 282
 Switzerland                                               1 297                 1 140                 2 636
 Middle East                                                 449                   319                   805


                                                           2 993                 2 579                 5 723


NOTES TO THE SUMMARISED FINANCIAL STATEMENTS

                                                       Unaudited             Unaudited
                                                        6 months              6 months               Audited
                                                              to                    to               year to
                                                       30/9/2015   Increase  30/9/2014             31/3/2015
                                                             R'm          %        R'm                   R'm

1.  EBITDA RECONCILIATION

Operating profit before depreciation (EBITDA)              3 853                 3 302                 7 235
Adjusted for:
Impairment of property and equipment                           ­                    31                    31
Profit on sale of property, equipment and vehicles            (3)                   (4)                  (87)
Normalised EBITDA                                          3 850       16%       3 329                 7 179


2. OTHER GAINS AND LOSSES

Realised gain on foreign currency forward contracts            ­           32                    32
Gain on disposal of subsidiary                                 ­                     ­                    34
Movement in ineffective cash flow hedges
Ineffective cash flow hedges                                  57                     ­                  (342)
Discount on loan repayment                                     ­                     ­                   211
Insurance proceeds                                             ­                   158                   158

                                                              57                   190                    93


3. FINANCE COST

Interest                                                     496                   465                   933
Amortisation of capitalised financing costs              56                    73                   147
Preference share dividend                                     65                    64                   128
Less: amounts included in the cost of qualifying assets       (1)                    ­                   (29)

                                                             616                   602                 1 179

4. COMMITMENTS

Capital commitments                                        3 698                 3 450                 3 779
Southern Africa                                            2 202                 1 897                 2 325
Middle East                                                  981                   626                   782
Switzerland                                                  515                 927                   672


5. EXCHANGE RATES                                              R                     R                     R

Average Swiss franc (ZAR/CHF)                              13.17                 11.82                 11.91
Closing Swiss franc (ZAR/CHF)                              14.20                 11.82                 12.55
Average UAE dirham (ZAR/AED)                                3.42                  2.90                  3.01
Closing UAE dirham (ZAR/AED)                                3.77                  3.09                  3.32
Average GBP (ZAR/GBP) (24 August 2015 to 30 Sep 2015)      20.84                   n/a                   n/a
Closing GBP (ZAR/GBP)                                      20.99                   n/a     n/a


6. NUMBER OF SHARES ISSUED                                 Number                Number               Number
                                                            '000                  '000                  '000

Ordinary shares in issue                                 979 068               867 957               867 957
Ordinary shares held in treasury                         (13 524)              (13 674)              (13 483)
Ordinary shares in issue net of treasury shares          965 544               854 283               854 474

7. FAIR VALUE MEASUREMENT

Derivative financial instruments comprise interest rate swaps and are measured at the present value of future 
cash flows estimated and discounted based on the applicable yield curves derived from quoted interest rates. 
Based on the degree to which the fair values are observable, the interest rate swaps are grouped as Level 2. 
Level 2 means that inputs other than quoted prices included within Level 1 that   are observable for the 
asset or liability, either directly (that is, as prices) or   indirectly (that is, derived from prices), 
whereas Level 1 refers to quoted prices   (unadjusted) in active markets for identical assets or liabilities.




                                                       Unaudited             Unaudited
                                                        6 months              6 months               Audited
                                                              to                    to               year to
                                                       30/9/2015             30/9/2014             31/3/2015
                                                             R'm                   R'm                   R'm

8. BUSINESS COMBINATIONS

Cash flow on business combinations
Hirslanden Clinique La Colline SA                              ­                 1 333                 1 333
Swissana Clinic AG                                             ­                   107                   107
IMRAD SA                                                       ­                     ­                     6

                                                               ­                 1 440                 1 446

On 25 June 2014, Hirslanden AG acquired a 100% 
interest in the operating company of Hirslanden 
Clinique la Colline SA. Hirslanden Clinique La 
Colline SA is a private hospital based in 
Geneva, Switzerland.


9. INVESTMENT IN ASSOCIATE

Spire Healthcare Group plc                                (8 678)                    ­                     ­


On 24 August 2015, the Group acquired a 29.9% shareholding in Spire Healthcare Group plc ("Spire"), a 
leading private healthcare group in the UK with a national network of 39 hopitals across the United Kingdom. 
The investment in Spire provides Mediclinic with a further opportunity to diversify into an attractive new 
geography with a strong currency. The group and Spire will benefit from collaboration, with the potential to 
unlock procurement benefits and knowledge transfer. On 15 July 2015, Remgro Limited, through its wholly-owned 
subsidiary, Remgro Jersey Ltd (subsequently renamed to Mediclinic Jersey Ltd), acquired 119 923 335 Spire 
shares equivalent to a 29.9% shareholding. The purchase of the equity investment were negotiated jointly by 
Mediclinic and Remgro with the seller. Mediclinic acquired Remgro's indirect shareholding in Spire for an 
amount equal to the aggregate of the purchase price paid by Remgro Jersey Ltd, transaction costs and funding 
costs, totalling approximately R8.7 billion. The Spire acquisition was effected through a series of 
transactions which ultimately resulted in Mediclinic Investments (Pty) Ltd, through a wholly-owned subsidiary, 
Business Venture Investments No 1871 (Pty) Ltd, owning 100% of the shares in Mediclinic Jersey Ltd, which is 
company directly holds the 29.9% interest in Spire.

OVERVIEW AND OUTLOOK

Notwithstanding the ongoing changes in the global and regional economies and the regulatory changes that 
continue to impact healthcare and its affordability, we are continuing to see a strong demand for quality 
private healthcare services in our three operating platforms. The trend is also prevalent in the UK, where 
during the period we acquired a 29.9% stake in Spire Healthcare Group plc, a leading provider of private 
healthcare, with 39 private hospitals.

Mediclinic International has continued to deliver strong revenue and profit growth. Our three operating 
platforms in Southern Africa, the Middle East and Switzerland have all achieved good growth in patient 
numbers and we continue to invest in buildings, technology and people to ensure we offer high quality 
private healthcare services to both in and out-patients.

The Group's earnings which are reported in South African rand, were again positively impacted by currency 
movements Our Swiss, Middle East and UK platforms contributed 66% of adjusted normalised headline earnings.

Our focus is to ensure that our patients come first, that we continuously improve our value proposition in 
terms of technology, care and the latest improvements in medicine and surgery. With three operating platforms 
and a significant investment in the UK, we can leverage best practice in terms of experience, knowledge and 
skills. Mediclinic remains well positioned for future growth.


TRADING RESULTS

The Group has maintained its consistent growth pattern.

Group normalised revenue increased by 16% to R19 565m (2014: R16 828m) for the period under review. 
Normalised operating profit before interest, tax, depreciation and amortisation ("normalised EBITDA") 
was 16% higher at R3 850m (2014: R3 329m) and adjusted basic normalised headline earnings per share 
was 19% higher at 214.1 cents (2014: 180.6 cents) with margins stable at 19.7%.

The current Group results included the following adjustment to determine normalised headline earnings:

•   An exceptional item of R57m (R45m after tax) to account for the six-month (1 April 2015 to 
    30 September 2015) mark-to-market fair value adjustment relating to the Swiss interest rate swaps, 
    which became ineffective during the prior financial year ended 31 March 2015 with the introduction 
    of negative Swiss interest rates.

The comparative results include a one-off item of R32m (R32m after tax) relating to a realised gain on 
foreign currency forward contracts.

*Effective from 24 August 2015, the Group acquired a 29.9% shareholding in Spire Healthcare Group plc. 
As Spire's accounting period ends on 31 December and the investment was made after 30 June 2015, no 
income from associate was included for the period under review. An adjustment to normalised headline 
earnings of R48m (R48m after tax) has been made to account for income from the associate for the 
period 24 August 2015 to 30 September 2015.

Excluding the adjustment and including the exceptional item, headline earnings for the period under 
review increased by 20% to R1 865m (2014: R1 555m) and basic headline earnings per ordinary share i
ncreased by 16% to 213.8 cents (2014: 184.4 cents). 

Movements in the exchange rates had a positive impact on the reported results. The average ZAR/Swiss 
franc (CHF) exchange rate was R13.17 compared to R11.82 for the comparative period and the average 
ZAR/UAE dirham (AED) exchange rate was R3.42 compared to R2.90 for the comparative period.

Finance cost
Finance cost includes amortisation of capitalised financing costs of R56m (2014: R73m). The capitalised 
financing costs are amortised over the term of the relevant loans in accordance with IAS 39 Financial 
Instruments.

Cash flow
The Group continued to deliver strong cash flow. The Group converted 85% (2014: 111%) of normalised 
EBITDA into cash generated from operations. Cash and cash equivalents increased from R4 779m at 
31 March 2015 to R5 733m at 30 September 2015. 

Interest-bearing borrowings
Interest-bearing borrowings increased from R29 156m at 31 March 2015 to R31 409m at 30 September 2015. 
The increase is mainly as a result of change in the closing ZAR/CHF and the ZAR/AED exchange rates. 
Foreign debt of the Group's Swiss and Middle Eastern operations, amounting to R25 912m, is matched 
with foreign assets in the same currencies. The foreign debt has no recourse to the Southern African 
operations' assets.

Assets
Property, equipment and vehicles increased from R53 776m at 31 March 2015 to R60 750m at 30 September 
2015, and intangible assets increased from R11 565m at 31 March 2015 to R13 050m at 30 September 2015. 
These increases are mainly as a result of additions as well as the change in the closing ZAR/CHF and 
the ZAR/AED exchange rates. 

Weighted average number of shares adjustment
In terms with IAS 33 paragraph 26, an adjustment to the weighted average number of shares in issue for 
the period under review and the prior year is required. Consequently, the basic headline earnings per 
share for the prior year was adjusted and decreased by 4.6 cents from 189.0 to 184.4 cents and  basic 
normalised headline earnings per share for the prior year decreased by 4.6 cents from 185.2 to 180.6 cents.

Normalised non-IFRS financial measures
The Group uses normalised revenue, normalised EBITDA, normalised headline earnings and normalised basic 
headline earnings per share as non-IFRS measures in evaluating performance and as a method to provide 
shareholders with clear and consistent reporting. These non-IFRS measures are defined as reportable EBITDA, 
headline earnings and basic headline earnings per share in terms of accounting standards, excluding one-off 
and exceptional items.

CORPORATE ACTIVITY
As previously released on the JSE Stock Exchange News Service (SENS), the Group successfully executed the 
following corporate actions during the period under review:

•   the Group raised R10bn through a rights issue that closed on 21 August 2015;

•   funded by the rights issue referred to above, the Group acquired a 29.9% shareholding in Spire 
    Healthcare Group plc, a leading private healthcare group led by a strong and highly experienced 
    management team with a national network of 39 hospitals across the United Kingdom, for R8.7bn with 
    effect from 24 August 2015; and

•   restructuring of the Mpilo Investments Holdings 1 (RF) (Pty) Ltd black economic empowerment transaction 
    established in 2005, with the benefit to Mediclinic of extending the lock-in period by an additional 
    three years to 31 December 2019. 

OPERATIONS IN SOUTHERN AFRICA

MEDICLINIC SOUTHERN AFRICA 

Financial and business performance

Mediclinic Southern Africa's normalised revenue increased by 9% to R6 759m (2014: R6 206m) for the period 
under review. Normalised EBITDA was 9% higher at R1 457m (2014: R1 332m). The revenue growth was driven by 
a 3.2% increase in bed-days sold and a 6.1% increase in the average income per bed-day. The number of 
patients admitted increased by 1.2%, while the average length of stay increased by 2.1%.

The Southern African operations contributed R626m (2014: R571m) to the normalised headline earnings of 
the Group.

Projects and capital expenditure

During the period under review, the Southern African operations spent R376m (2014: R364m) on expansion 
capital projects and new equipment and R112m (2014: R89m) on the replacement of existing equipment. In 
addition, R151m (2014: R174m) was spent on the repair and maintenance of property and equipment, charged 
through the income statement.

For the current financial year, R813m is budgeted for expansion capital projects and new equipment, 
R333m for the replacement of existing equipment and R316m for repairs and maintenance. Incremental EBITDA 
resulting from capital projects in progress or approved is budgeted to amount to R56m and R55m in 2016 
and 2017 respectively.

The number of beds increased from 7 885 to 7 983 during the period under review of which the most significant 
were the Mediclinic Limpopo Day Clinic and Mediclinic Durbanville Day Clinic.

The number of beds is expected to increase from 7 983 to 8 070 during the next six months.

Regulatory environment 

The Competition Commission is still in the process of undertaking a market inquiry into the private healthcare 
sector in South Africa. In line with the Commission's published Terms of Reference and Administrative Guidelines, 
Mediclinic prepared and delivered a comprehensive submission and has submitted further information and data as 
requested by the Commission.  Mediclinic has the assistance of expert legal and economic advisors and we believe 
that we are well prepared to participate fully in the inquiry. In terms of the Commission's latest timetable, 
the inquiry should be completed by December 2016.

Mediclinic awaits the final norms and standards as set by the Minister of Health in terms of the tasks of 
the Office of Health Standards Compliance. We support this initiative and believe this to be a positive 
development that should enhance the quality of care in both the public and private healthcare sectors once 
it has been implemented comprehensively.

OPERATIONS IN SWITZERLAND

HIRSLANDEN 

Financial and business performance

Hirslanden's normalised revenue increased by 19% to R10 310m (2014: R8 646m) for the period under review. 
Normalised EBITDA was 16% higher at R1 871m (2014: R1 607m). In Swiss francs, normalised revenue increased by 
7% to CHF 783m (2014: CHF732m) and normalised EBITDA increased by 4% to CHF142m (2014: CHF136m). The normalised 
revenue growth is a result of a 6.5% increase in inpatient admissions and increased revenue per case due to 
increased numbers of complex cases. 

Hirslanden contributed R763m (2014: R657m) to the normalised headline earnings of the Group. In Swiss francs, 
Hirslanden contributed CHF58m (2014: CHF55m) to the normalised headline earnings of the Group.

Projects and capital expenditure

During the period under review, Hirslanden invested R289m (CHF22m) (2014: R289m (CHF24m)) in expansion capital 
projects and new equipment and R329m (CHF21m) (2014: R274m (CHF23m)) on the replacement of existing equipment. 
In addition, R248m (CHF18m) (2014: R217m (CHF18m)) was spent on the repair and maintenance of property and 
equipment, charged through the income statement. 

For the current financial year CHF70m is budgeted for expansion capital projects and new equipment, CHF80m for 
the replacement of existing equipment and CHF39m for repairs and maintenance. Incremental EBITDA resulting 
from capital projects in progress or approved is budgeted to amount to CHF8m and CHF6m in 2016 and 2017 
respectively.

The number of inpatient beds increased from 1 655 to 1677 during the period under review. The number of 
inpatient beds is expected to remain stable during the next six months.

Regulatory environment

Outpatient management initiatives

Recently there have been discussions regarding the revision of the Health Care Insurance Act and the management 
of the outpatient sector. Furthermore the moratorium on new doctors' practices initially adopted in 2002 and 
extended several times is now due to become a permanent law. The revision of the outpatient tariff ("TARMED") is 
also being considered and expected to be implemented in 2017 or 2018.

Highly specialised medicine

Over the last few months there have been no relevant decisions made regarding highly specialised medicine.

OPERATIONS IN UNITED ARAB EMIRATES

MEDICLINIC MIDDLE EAST 

Financial and business performance

Mediclinic Middle East's normalised revenue increased by 26% to R2 496m (2014: R1 976m) for the period under 
review. Normalised EBITDA increased by 34% to R522m (2014: R390m). In UAE dirhams, normalised revenue increased 
by 7% to AED730m (2014: AED681m) and normalised EBITDA increased by 13% to AED153m (2014: AED135m). The revenue 
growth was driven by bed-days sold increasing by 1%, hospital outpatient consultations and visits to the 
emergency units increasing by 1% and clinic outpatient consultations increasing by 4%. 

Mediclinic Middle East contributed R431m (2014: R295m) to the normalised headline earnings of the Group. In 
UAE dirhams, Mediclinic Middle East contributed AED126m (2014: AED102m) to the normalised headline earnings 
of the Group. 

Projects and capital expenditure

During the period under review, Mediclinic Middle East invested R335m (AED98m) (2014: R57m (AED20m)) in expansion 
capital projects and new equipment, apart from R43m (AED12m) (2014: R14m (AED5m)) on the replacement of existing 
equipment. In addition, R35m (AED10m) (2014: R26m (AED9m)) was spent on repairs and maintenance of property and 
equipment, as accounted for in the income statement. 

For the current financial year, AED133m is budgeted for expansion capital projects and new equipment to enhance 
the business in the longer term and AED145m is budgeted for the construction of the Mediclinic Parkview Hospital, 
AED32m for the replacement of existing equipment and AED20m for repairs and maintenance. EBITDA resulting from 
capital projects in progress or approved is budgeted to amount to AED18m in 2017.

The number of beds remained at 382, which includes 27 day beds available at the clinics. 

During the period under review, Mediclinic City Hospital continued construction on the north wing extension, 
due to open in mid-2016.  Furthermore, land was recently acquired in the fast-growing southern side of Dubai 
for the construction of the 188-bed Mediclinic Parkview Hospital.

Regulatory environment

The Dubai Health Authority ("DHA") is now in the final phase of introducing mandatory health insurance, intended 
to ensure that all individuals have a health insurance plan.  The introduction of mandatory health insurance in 
Dubai is not expected to have a significant impact on the results of the Group, since our target market already 
had high levels of health insurance prior to mandatory insurance.  The DHA also commenced with a process of price 
reform, which will be gradually implemented over a number of years.  The DHA has indicated that prices will 
not be set and the principle of price negotiations between providers and funders will be maintained within this 
new pricing framework.

EVENTS AFTER THE REPORTING PERIOD

A significant event occurred between 30 September 2015 and 12 November 2015 which is not reflected in the interim 
summarised financial statements.

The possible combination of Mediclinic and Al Noor Hospitals Group plc, a private healthcare provider primarily
based in the emirate of Abu Dhabi and listed on the London Stock Exchange, was released on SENS on 14 October 2015. 
The proposed combination remains subject to various suspensive conditions, including Mediclinic and Al Noor 
shareholder approval.

CHANGES TO THE BOARD OF DIRECTORS

There were no changes to the Board during the period under review.

BASIS OF PREPARATION

The accounting policies applied in the preparation of these summarised Group interim financial statements, which 
are based on reasonable judgements and estimates, are in accordance with International Financial Reporting 
Standards ("IFRS") and are consistent with those applied during the year ended 31 March 2015. The summarised Group 
interim financial statements have been prepared in accordance with the Financial Reporting Guides issued by the 
Accounting Practices Committee of the South African Institute of Chartered Accountants and in terms of IAS 34 
Interim Financial Reporting as well as in compliance with the Companies Act 71 of 2008, as amended, and the 
Listings Requirements of the JSE Limited. The preparation of the summarised Group interim financial statements 
was supervised by the Chief Financial Officer, Mr CI Tingle, CA(SA).

CASH DIVIDEND TO SHAREHOLDERS

Notice is hereby given that the directors have declared an interim gross cash dividend in respect of the period 
under review of 36.0 cents (2014: 31.0 cents) (30.60 cents (2014: 26.35 cents) net of dividend withholding tax) 
per ordinary share. The dividend declared increased by 16% compared to the comparative period. 

The dividend has been declared from income reserves. A dividend withholding tax of 15% will be applicable to all 
shareholders who are not exempt therefrom. The Company's issued share capital at the declaration date is 
979 068 436 ordinary shares.


The salient dates for the dividend will be as follows:

Last date to trade cum dividend                                 Friday, 27 November 2015
First date of trading ex dividend                               Monday, 30 November 2015
Record date                                                     Friday, 4 December 2015 
Payment date                                              Monday, 7 December 2015

Share certificates may not be dematerialised or rematerialised from Monday, 30 November 2015 to Friday, 
4 December 2015, both days inclusive. 

Signed on behalf of the board of directors:
E DE LA H HERTZOG                       D P MEINTJES
Chairman                               Chief Executive Officer

Stellenbosch, 12 November 2015

DIRECTORS
Dr E de la H Hertzog (Chairman), DP Meintjes (Chief Executive Officer), CI Tingle (Chief Financial Officer), 
JJ Durand, JA Grieve (British), Prof Dr RE Leu (Swiss), Dr MK Makaba, N Mandela, TD Petersen, KHS Pretorius, 
AA Raath, DK Smith, PJ Uys, Dr CA van der Merwe, Dr TO Wiesinger (German)

COMPANY SECRETARY
GC Hattingh

HEAD OFFICE ADDRESS AND REGISTERED OFFICE
Mediclinic Offices, Strand Road, Stellenbosch, 7600
Postal address: PO Box 456, Stellenbosch, 7599
Tel: +27 21 809 6500 Fax: +27 21 886 4037
Ethics Line: 0800 005 316 (if dialling from South Africa) or ethics@mediclinic.com

WEBSITE
www.mediclinic.com   

TRANSFER SECRETARIES
South Africa:
Computershare Investor Services (Pty) Ltd
70 Marshall Street, Johannesburg, 2001
Postal address: PO Box 61051, Marshalltown, 2107
Tel: +27 11 370 7700 Fax: +27 11 688 7716

Namibia:
Transfer Secretaries (Pty) Ltd
4 Robert Mugabe Avenue, Windhoek
Postal address: PO Box 2401, Windhoek
Tel: +264 (61) 227 647 Fax: +264 61 248 531

SPONSOR
South Africa: Rand Merchant Bank (a division of FirstRand Bank Limited)
Namibia: Simonis Storm Securities (Pty) Ltd



Date: 12/11/2015 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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