Hospital and clinics group Network Healthcare Holdings (Netcare) said on Friday that, notwithstanding satisfactory growth and activity in its core hospital and ancillary health-care divisions, its results for the year ended September 30 will be impacted by period-specific, non-recurring items and prior year adjustments.
Nonetheless, the group still expects to record positive growth in headline earnings per share for the year of approximately 5% to 15%, it said.
Among the non-recurring items are a one-off charge of R26,9-million for restructuring costs at Netcare 911, cancellation of forex-linked contracts, the discontinuation of loss-making business units and products and the issue of 100-million Netcare shares to — and subsequent reinvestment in — Netpartner Investments, which had the predictable short-term dilutionary effect on headline earnings per share of approximately 3% for the period.
Due to the volatility in the Middle East, a strategic decision was made to discontinue all operations in that region. The group has written off an amount of R22,7-million relating to associated costs in this accounting period.
In addition, since the introduction of the regulations applicable to single exit pricing on pharmaceuticals on May 1, the group has been impacted negatively by a higher cost of drug purchases for the four-and-a-half months preceding successful renegotiation of tariffs with the funders.
In terms of AC 133 (Financial Instruments: Recognition and Measurement) and AC 103 (Accounting Policies, Changes in Accounting Estimates and Errors), prior-year adjustments have been made for financial assets relating to the Netcare Trust and supplier rebates, the group said.
Netcare is due to release its results on Wednesday November 17. — I-Net Bridge