Mediclinic (MEI) – How not to waste a pandemic

With its FY22 results, Mediclinic (MEI) has shown how not to waste a pandemic opportunity. MEI more than doubled the cash generated from its operating activities, enabling the group to emerge from the more contagious but less potent Covid season with more cash flow than it had ever generated from its operations.

All of its three divisions recorded robust patient activity, accompanied (except in the Middle East) by reasonable increases in revenue per inpatient case and patient paid days. The Middle East continues to show strong inpatient and outpatient activity, with outpatient volumes recovering to a slightly lower level than the highest levels achieved during the Al Noor hospitals combination. Southern Africa’s hospital patient paid days are back to the FY18 and FY19 levels, boosted by higher Covid patient activity compared to FY21. Inpatient volume growth in Switzerland was accompanied – for the first time since FY18 – by a recovery of growth in inpatient revenue per admission.

We are encouraged that there is still headroom for the three divisions to improve patient activity to support revenue growth – an indication of improving occupancy rates in Southern Africa operations supported by non-Covid admissions, the ramping up of the Airport Road Hospital in Abu Dhabi and the new revenue streams in Switzerland. We believe MEI is set to continue to show good earnings growth in the short term.