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Netcare Ltd. (NTC), an owner of private hospitals in South Africa and Britain, swung to a full-year loss after it wrote down 11.4 billion rand ($1.3 billion) from its U.K. properties amid sluggish economic growth.
The British unit, which operates 35 hospitals, “experienced a difficult trading year, characterized by continuing recessionary pressures and ongoing NHS reforms,” Johannesburg-based Netcare said in a statement today, referring to Britain’s state-funded health service. Revenue from the U.K. gained 0.4 percent during the 12 months through September, compared with 9.3 percent in South Africa, the company said.
The write down led to a loss of 9.3 billion rand for the period, compared with a 1.9 billion rand profit in the same period last year. The shares fell as much as 3.1 percent, the biggest intraday drop in more than a month, and were down 2 percent at 3:25 p.m. in Johannesburg.
“Demand for health care in South Africa will continue to grow,” Chief Executive Officer Richard Friedland said by phone from Johannesburg. Netcare plans to expand its number of hospital beds in Africa’s biggest economy, where an emerging middle class are spending more money on private health care despite slowing economic growth.
Netcare is due to repay debt of 1.5 billion pounds ($2.4 billion) related to its British unit by October 2013 and said it is seeking a refinancing of the loan. Tough macro-economic conditions in the U.K. and the European debt crisis are providing challenges to reaching an agreement, the company said.
Friedland declined to comment on the refinancing of the U.K. debt.
Net income before exceptional items rose 15 percent to 2.1 billion rand ($237 million) for the year through September, Netcare said. Revenue advanced 12 percent to 25.2 billion rand.
The final dividend was raised 9.7 percent to 34 cents a share.
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