Netcare postpones R800-million of capex

Business

Durban – Private hospital group Netcare yesterday said that it postponed approximately R800-million of capital expenditure earmarked for new and current projects to preserve cash following the Covid-19 fallout on its operations.

The group told shareholders in a trading guidance fort he 11 months to end August that only key strategic projects would be permitted to continue as planned.

“However, capital expenditure on key strategic projects continued during the period and total spend for financial year 2020 is expected to amount to approximately R1billion, as previously guided, including additional Covid-19-related capex of approximately R155m,” said the group.

Netcare added that its revenue declined 12.9% during the period as a result of the pandemic compared to last year.

The group said the second half of this year experienced disruptions on Covid-19 restriction, hitting its earnings before interest, tax, depression and amortisation (Ebitda) before IFRS 16 by 50.8% while operating profit before tumbled 61.5% compared to a year earlier.

The company’s Ebitda margin also saw a decline to 11.5% compared with 20.3% reported during the corresponding period in 2019. They attributed this loss to declined activity, resultant negative operating leverage and additional costs of R219m related to the pandemic.

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