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S.Africa's Life Healthcare posts profit slide, holds back dividend on pandemic hit

South Africa's Life Healthcare Group on Thursday reported a near 12% drop in half-year profit and held back on its interim dividend, as the COVID-19 pandemic forced people to delay elective medical procedures that form the bulk of revenue for hospitals.

Life Healthcare's H1 revenue up 4%

To review dividend after FY results

Expects growth in H2, but flags third wave hit

Adds details from results, background

JOHANNESBURG, May 27 (Reuters) - South Africa's Life Healthcare Group LHCJ.J on Thursday reported a near 12% drop in half-year profit and held back on its interim dividend, as the COVID-19 pandemic forced people to delay elective medical procedures that form the bulk of revenue for hospitals.

The health crisis has also pushed South African hospitals to prioritise beds for coronavirus patients, and experts have said that the country might see the onslaught of a third wave of COVID-19 infections between June and July.

Life Healthcare's headline earnings per share (HEPS), the main profit gauge for South African companies, fell to 47.4 cents for the six months ended March 31 from 53.8 cents a year earlier.

However, the company's revenue from continuing operations for the first half was up 4% to 13 billion rand.

The country's second-biggest operator of hospital networks also said it expects a doubling in full-year profit, primarily due to a 793 million rand ($57.64 million) impairment charge it had taken the previous year.

Life Healthcare said its revenue and operating profit in Southern Africa would grow in the second half, but cautioned that its outlook could vary depending on "the timing and magnitude of a potential third COVID-19 wave."

It said it would reconsider a dividend after its full-year results.

The company operates in South Africa and Botswana and has investments in medical imaging services company Alliance Medical which operates in Europe.

($1 = 13.7584 rand)

(Reporting by Promit Mukherjee; Editing by Ramakrishnan M.)

((promit.mukherjee@thomsonreuters.com; +27 64833 4448;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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