Regulatory pressures are still acting as a drag on private hospital group Mediclinic’s (MDC) full year performance as earnings per share (EPS) come in below market expectations.
The company reported 29.8c EPS versus consensus forecast of 31.8c.
Shares in the company are down 3.9% to 835p as investors are disturbed by the earnings drop and concerned about its outlook.
Management have warned that lower economic growth and more competition could impact earnings in the future.
While operating profit has climbed 26% to £362m in the year to 31 March, the Middle East division is still struggling. It contributed £33m to underlying earnings, down from £57m in the prior year.
Jefferies analyst James Vane-Tempest believes the share price is down on the results due to the realisation that an improvement in the United Arab Emirates operations will take longer than expected.
Unfortunately, this is not the only division in the Mediclinic portfolio going through difficult times.
Vane-Tempest says: ‘A continued difficult macro environment persists in South Africa and lower margins are anticipated in Switzerland.’
Investors may have been expected more from the private hospital business as it reported in April that its 20% co-payment was axed for holders of a Thiqa medical insurance card in Abu Dhabi.
The analyst says the market was ‘anticipating a significant uplift’, which has yet to materialise.
Mediclinic still expects a gradual improvement in its Middle East platform for the year to 31 March 2018.