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HomeWeekly RoundupCOVID-19 continues to weigh on Netcare's profits

COVID-19 continues to weigh on Netcare's profits

Netcare, South Africa’s third-largest private hospital operator by market value, says COVID-19 continues to weigh on its profits, with it seeing more pandemic-related patients in the three months to end-December than it did in the prior seven. Business Day reports that in a trading update, Netcare said it had managed to improve its operational profit during its first quarter to end-December, but activity levels and occupancies have still not recovered to pre-pandemic levels.

In line with global trends, the emergence of a more contagious variant of the virus, coupled with the relaxation of lockdown measures, resulted in a more severe second wave of infections, the group said. This disrupted elective surgeries at some hospitals in December, although these constraints have since lifted.

Netcare has said it would be better prepared for a second wave, saying in its update it had carefully managed its hospital capacity, while there had also been a growth in elective surgeries during October and November.

During the peak of the second wave, approximately 60% of total beds were allocated to COVID-19 patients compared to approximately 80% during the peak of the first wave in July 2020, Netcare is quoted in the report as saying.

Since the emergence of the virus, Netcare has treated 45,600 COVID-19 patients of which 27,363 were admitted to its hospitals, with a quarter of these treated in high care or intensive care.

The group said it incurred R86m of coronavirus-related costs in its first quarter, adding there was still a high degree of uncertainty regarding the effects of COVID-19, particularly in terms of a possible third wave.

In the absence of a third wave, the group said it expects profit margins to continue improving over the next six months, albeit off “a low base”.

 

[link url="https://www.businesslive.co.za/bd/companies/healthcare/2021-02-05-netcare-says-strain-of-covid-19-second-wave-was-more-severe/?"]Full Business Day report (Restricted access)[/link]

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