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Netcare Reports Strong Growth in Revenue and Profit, Declares Consistent Interim Dividend | Rateweb
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Netcare Reports Strong Growth in Revenue and Profit, Declares Consistent Interim Dividend

Netcare recently announced its unaudited interim group results for the six months ending 31 March 2024. The results indicate steady growth in revenue and profitability, demonstrating the company’s resilience and strategic efficiency. This article delves into the financial highlights, earnings per share, dividend declaration, and overall financial position of Netcare Limited.

Revenue and Profit Growth

Steady Increase in Revenue

Netcare Limited reported a revenue increase of 4.3%, reaching R12.034 billion from R11.537 billion in the previous period. This growth can be attributed to the company’s effective management strategies and the consistent demand for healthcare services.

EBITDA and Operating Profit Enhancement

The company’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rose by 7.0%, totaling R2.156 billion compared to R2.015 billion previously. This improvement signifies enhanced operational efficiency and cost management. Additionally, the operating profit saw a significant rise of 7.9%, from R1.382 billion to R1.491 billion, underscoring the company’s robust operational performance.

Profit for the Period

Netcare’s profit for the period climbed by 6.3%, reaching R708 million, up from R666 million. This increase in profit reflects the company’s ability to maintain its profitability amidst market challenges.

Earnings Per Share (EPS)

Basic and Diluted EPS

The basic earnings per share increased by 6.3% to 48.7 cents, compared to 45.8 cents in the previous period. Similarly, diluted earnings per share saw a 6.6% rise, moving from 45.7 cents to 48.7 cents. These increases highlight the company’s strong earnings growth.

Headline and Adjusted Headline EPS

Headline earnings per share grew by 9.2%, from 44.8 cents to 48.9 cents. Adjusted headline earnings per share also rose by 5.8%, reaching 49.0 cents from 46.3 cents. This growth in headline and adjusted EPS indicates the company’s sustained financial health.

Dividend Declaration

Consistent Interim Dividend

Netcare declared an interim dividend of 30.0 cents per share, maintaining consistency with the previous year. This declaration reflects the company’s commitment to providing consistent returns to its shareholders.

Dividend Tax Implications

The gross interim dividend is subject to a 20% local dividend withholding tax, resulting in a net dividend of 24.0 cents per ordinary share for non-exempt shareholders. Shareholders exempt from the dividend withholding tax will receive a net dividend of 30.0 cents per ordinary share.

Financial Position

Total Assets and Liabilities

Netcare’s total assets increased by 4.3%, reaching R27.972 billion from R26.806 billion. This growth in assets underscores the company’s expanding operational base. Conversely, total liabilities grew by 7.2%, from R15.713 billion to R16.837 billion, reflecting the company’s increased financial obligations.

Shareholders’ Equity and Net Debt

The total shareholders’ equity remained relatively stable at R11.135 billion, compared to R11.093 billion in the previous period. Net debt (excluding lease liabilities) saw a significant increase of 16.4%, rising from R5.019 billion to R5.841 billion. This rise in net debt indicates higher financial leverage, which might impact future financial flexibility.

Table: Key Financial Metrics

Metric31 March 202431 March 2023% Change
Revenue (Rm)12,03411,5374.3%
EBITDA (Rm)2,1562,0157.0%
Operating Profit (Rm)1,4911,3827.9%
Profit for the Period (Rm)7086666.3%
Basic Earnings per Share (cents)48.745.86.3%
Diluted Earnings per Share (cents)48.745.76.6%
Headline Earnings per Share (cents)48.944.89.2%
Adjusted Headline Earnings per Share (cents)49.046.35.8%
Interim Dividend per Share (cents)30.030.0

Conclusion

Netcare Limited’s unaudited interim results for the six months ending 31 March 2024, showcase a period of robust growth and financial stability. The company has demonstrated significant improvements in revenue, EBITDA, and operating profit. The increase in basic, diluted, headline, and adjusted headline earnings per share further reflects Netcare’s strong financial performance.

Moreover, the consistent interim dividend declaration underscores Netcare’s commitment to rewarding its shareholders. However, the notable increase in net debt signals a potential area of concern that requires careful monitoring.