Interim results for the six months ended 31 March 2024

Netcare posts strong interim results, highlighting resilience and strategic advancements

Monday, May 20 2024


  • 4.3% increase in Group revenue to R12 034 million
  • 7.5% growth in normalised Group EBITDA, demonstrating strong operating leverage
  • 60 basis point improvement in EBITDA margin of Hospital and pharmacy operations sub-segment (excluding strategic and generator diesel costs)
  • 5.8% increase in adjusted HEPS to 49.0 cents
  • R146 million invested in share buybacks in H1 2024
  • ROIC increased to 10.9% (H1 2023: 10.6%)
  • Interim dividend of 30.0 cents per share

The Netcare Group, which provides innovative, quality healthcare across South Africa, has delivered a solid set of financial results for the six months ended 31 March 2024 (“H1 2024”).  This has been achieved despite lower volumes and high inflation in the healthcare sector, particularly wages and medical consumables.

Group revenue for H1 2024 increased by 4.3% to R12 034 million (H1 2023: R11 537 million), and normalised Group EBITDA for H1 2024 improved by 7.5% to R2 167 million (H1 2023:  R2 015 million). The Group EBITDA margin increased by 50 basis points to 18.0% in H1 2024 from 17.5% in H1 2023.

While revenue growth amounted to 4.3% for H1 2024 and despite the seasonally lower volumes, it is pleasing that operating profit increased by 8.7%, which is indicative of Netcare achieving strong operating leverage due to an ongoing focus on operational efficiencies.

Normalised operating profit increased by 8.7% from R1 382 million to R1 502 million, and normalised profit before taxation increased by 7.1% to R1 000 million (H1 2023: R934 million).

Adjusted headline earnings per share (“HEPS”) increased by 5.8% to 49.0 cents (H1 2023: 46.3 cents).

Netcare CEO, Dr Richard Friedland, commented that in H1 2024, activity across the Group was influenced by sector seasonality, as well as lower respiratory admissions, a reduction in maternity cases, the intentional cessation of poor credit risk activity and, to a lesser extent – and in line with the Group’s expectations – changes in low-cost medical scheme networks.  He said, “These issues led to total paid patient days for H1 2024

decreasing by 0.8% compared to the prior period. It is, however, pleasing that total paid patient days grew by 0.4% for the seven months to 30 April 2024”.

The Netcare Board of Directors has declared an interim dividend of 30.0 cents per share, representing 61.2% of adjusted HEPS, which is in line with the Group’s policy that aims to provide shareholders with a sustainable dividend of 50% – 70% of earnings.

In line with Netcare’s capital allocation strategy of returning excess cash to shareholders, the Group continued with its share buyback program, whereby a total of 11.2 million ordinary shares were acquired in the market in H1 2024 at an average price of R12.96. A further 19.1 million ordinary shares have been purchased post 31 March 2024 at an average price of R11.35. Collectively, from 7 September 2023 to 15 May 2024, 54.7 million ordinary shares have been repurchased at a total cost of R684 million and an average price of R12.47 per share.

Total Group capex, including strategic projects, amounted to R510 million for H1 2024, of which R50 million related to expansionary projects.

At 31 March 2024, the Group‘s cash resources and available undrawn committed facilities amounted to R3.3 billion. Group net debt (exclusive of IFRS 16 lease liabilities) increased to R5.8 billion from R5.0 billion at 30 September 2023 as a result of normal seasonality, the payment of ordinary and preference dividends, share buybacks and higher interest rates.


The Group has made excellent progress across all its strategic projects in H1 2024.  Netcare is in the concluding phases of the implementation of its ten-year strategy to transform the way the Group delivers health and care.
Person centred health and care: In 2018, Netcare embarked on a groundbreaking strategy to fundamentally transform the way it delivers health and care. Netcare has called this ‘person centred health and care, that is digitally enabled and data driven’. The first phase of this strategy entailed an ambitious digitisation project to implement Electronic Medical Records (“EMR”) across the Group’s entire ecosystem. Dr Friedland said, “In April 2024, we successfully completed this ambitious initiative in line with the capex and opex budgets and this represents an inflection point for our business and a significant milestone for the African continent”.

Central to the first phase was the implementation of Netcare’s CareOn hospital EMR system, which has now been seamlessly integrated across the acute hospital portfolio. In addition to the myriad of clinical and patient benefits, gross cumulative financial savings and benefits of R204 million from FY 2022 to date have met expectations, and the digitisation initiative will be accretive from H2 2024. The CareOn project is set to deliver an IRR in excess of 21%. The CareOn program has garnered widespread adoption, with over 29 000 active users, including nurses, doctors, pharmacists, allied professionals and administrative personnel.

Completion of this first phase of ‘digitally enabled’ has enabled the next two phases of the ten-year strategy to transform the way the Group delivers health and care. With more than 41GB of clinical data generated per day, Netcare is now progressing to the next phase of clinical efficiency, which will be rolled out over the next two to three years. Dr Friedland commented, “This will allow us to analyse this wealth of data to enhance patient safety, quality of outcomes and care at the most appropriate cost. To this end, we have begun implementing an

analytics platform that will enable our clinical teams and clinicians to access data and provide them with the analytical tools to fully interrogate and understand the data. We will be providing our clinicians access to Generative AI and NLP tools to enable clinicians to easily publish their clinical studies on a large scale. We believe this will result in clinicians within Netcare becoming significant contributors to clinical research and the maintenance of the highest standards of medicine and surgery in South Africa”.

Also, as a result of the large amount of rich clinical data being produced in real time, the application of machine learning and predictive analytics is now becoming a reality, further benefiting patients and healthcare professionals throughout the Netcare ecosystem. Netcare is currently piloting an application that will assist in identifying specific life-threatening clinical events several hours before their onset, thus allowing timeous intervention and enhancing patient care and safety.

The third phase of the strategy, that of ‘person centred health and care’, which entails providing patients with their personal health records and engaging meaningfully with them, is being rolled out in tandem with phase two and will be completed over the next three to four years.

Netcare App: There has been a robust uptake of the new Netcare App, which was launched in July 2023, allowing for online pre-admissions, booking of doctor appointments, geo-location in an emergency, and the ability to purchase NetcarePlus products. Efforts to strengthen digital engagement with patients and consumers are continuing, with new features in development aimed at improving the patient’s in-hospital journey.
Promoting access to healthcare: Sales of NetcarePlus products to the retail and corporate segments are gaining traction, expanding access to private healthcare beyond traditional medical scheme lives and contributing to the Netcare ecosystem through the increased utilisation of services. NetcarePlus GapCare products enable Netcare to retain patients in networks where Netcare is not a designated service provider.

Netcare Diagnostics: Netcare Diagnostics, which supports a black female owned pathology service provider, Dr Esihle Nomlomo Inc., recorded steady volumes. Following the first stage rollout of 133 blood gas analysers at Netcare’s intensive care and high care units, a further 70 point of care devices were commissioned at 11 emergency departments. Additionally, the service has been rolled out at 21 Medicross facilities to date and will be extended to further sites in H2 2024.

Environmental sustainability: Netcare’s environmental sustainability strategy delivers ongoing tangible financial savings and plays a vital role in reducing exposure to the impacts of the instability of the national electricity grid, as well as mitigating the risks associated with the current water crisis in South Africa. In 2023, the Group completed phase one of the environmental sustainability strategy (spanning 2013 – 2023), where Netcare exceeded targets and garnered cumulative operational savings and cost avoidance benefits of more than R1.5 billion to FY 2023, yielding an IRR of 40%. The Group’s 2030 strategy (phase two) is aimed at reducing Scope 2 emissions to zero by 2030 by ensuring 100% utilisation requirements from renewable sources, reducing Scope 1 and 2 emissions by a combined 84% and placing a large focus on waste, water and back-up energy (generator) sources.

Water security: Water security is a critical risk in South Africa that is likely to increase in the coming decade. The water crisis is particularly pronounced in Gauteng, where the majority of Netcare hospitals are located. While operations are exposed to the water crisis, the Group has several initiatives to mitigate the risk. Given the Group’s comprehensive water management strategies, Netcare does not foresee any significant capital expenditure or financial ramifications resulting from the present water crisis.


The hospital and emergency services division, which comprises acute and mental health hospitals, as well as emergency and ancillary services, increased revenue in H1 2024 by 4.3% to R11 705 million (H1 2023: R11 226 million). Total paid patient days (“PPD”) decreased by 0.8% in H1 2024, comprising a 1.7% reduction in acute PPD and a 7.0% increase in mental health PPD. The decline in acute hospital PPD is due to sector seasonality, a decrease in respiratory, maternity and private cases, the intentional cessation of poor credit risk activity and, to a lesser extent and in line with the Group’s expectations, changes in low-cost networks.

The month of April 2024 has, however, reflected a recovery of the sector seasonality experienced in H1 2024.

The enduring weak macroeconomic environment and increased pressure on disposable income have driven growth in more affordable restricted network plans. Despite the changes in various networks, Netcare’s significant geographic footprint, coupled with NetcarePlus GapCare products, enabled the Group to retain a steady portion of patients in networks where Netcare is not a designated service provider. Netcare remains focused on driving efficiencies to mitigate the impact of the lower tariffs related to these networks.

Demand for mental health remains strong, and PPD grew by 7.0% in H1 2024 against the prior period, with the new Netcare Akeso Gqeberha facility (commissioned in May 2023) contributing 5.2% of this growth. An average occupancy of 69.3% (71.0% excluding Netcare Akeso Gqeberha) was achieved. Same store PPD for the month of March 2024 were lower than March 2023, with activity normalising in April 2024, although slightly later than the acute hospitals. Resultantly, PPD for the seven months to April 2024 increased by 6.9% (with Netcare Akeso Gqeberha contributing 5.4%).

Notwithstanding the lower volumes, costs have been well contained. Normalised EBITDA for the hospital and emergency services segment increased by 8.2% to R2 096 million from R1 937 million in H1 2023.
The Group has granted admission rights to 59 specialists at its acute and mental health facilities during H1 2024.

Primary care division

The occupational health business recorded a strong performance, enhanced by new contracts.  However, activity in the medical and dental practices was impacted by sector seasonality, with GP and dental visits declining by 4.6% against the prior period. A strong improvement in April 2024 saw visits for the seven months ending April 2024 decreasing by 1.5% against the comparative period.  Revenue growth amounted to 6.3% for H1 2024. EBITDA margins declined from an underlying margin of 24.0% to 21.1%.


On 15 May 2024, the President of South Africa signed the National Health Insurance (“NHI”) Bill. Extensive and constructive inputs were made over several years by a wide range of stakeholders, including Netcare. These were motivated by a genuine desire to seek improvements to the Bill to achieve practical and sustainable attainment of the policy objective of universal healthcare.

Dr Friedland commented, “Netcare has always acknowledged that the inequities in healthcare access and delivery in South Africa need to be addressed and we remain fully supportive of universal healthcare. We firmly

believe that it is essential to get NHI right in the interests of all South Africans. The Bill was, however, signed without addressing fundamental areas of weakness. Furthermore, significant flaws in the Bill and the legislative processes followed in promulgating the Bill will likely result in the Bill being challenged on numerous fronts, unfortunately leading to further delays in implementation”.

These potential delays in furthering the provision of universal healthcare could have been avoided, had government engaged meaningfully with all interested parties.

The concluding phases of Netcare’s ten-year strategy to transform the way we deliver health and care will remain unaffected, and we expect it to further enhance our future participation in the provision of universal healthcare.


As previously communicated, Netcare has secured a successor to Dr Richard Friedland. The details remain confidential at this stage. To ensure a smooth transition, at the Board’s request, Dr Friedland has agreed to continue as CEO until March 2025.


The macroenvironment remains challenging in light of the prevailing elevated unemployment rates and a financially constrained consumer base. Furthermore, the persistent downturn in formal sector employment has engendered sluggish growth in medical aid membership.

“However”, said Dr Friedland, “we are encouraged by the resilience of the pool of insured lives underscoring the sustainable demand for quality private healthcare, which is exacerbated by the growing disease burden and ageing insured population. We remain confident that our unique strategy of person centred health and care, that is digitally enabled and data driven, positions the Group to navigate these challenges and benefit from the changing dynamics in the healthcare sector, thereby allowing us to continue to deliver sustainable earnings growth and favourable returns for shareholders, with benefits for all other stakeholders”.
Netcare is expecting positive growth in total PPD in H2 2024. However, the decline in activity in H1 2024 will result in full year growth ranging from -0.5% to 0.5%. Acute hospital PPD for H2 2024 are expected to grow between 0.5% and 1.0% versus the 1.7% decline in the first half. The rate of growth in mental health patient days for the full year will reduce as the new Netcare Akeso Gqeberha facility was included in the base from May 2023. Total Group revenue is expected to grow between 5.0% and 5.5%, and normalised EBITDA margins will benefit from operational efficiencies off the FY 2023 base of 17.5%.

Following the successful commissioning of Netcare Akeso Gqeberha (72 beds) in May 2023, Netcare is exploring opportunities to meet the demand for mental healthcare and plans to expand Netcare Akeso’s footprint further by adding 164 beds. Construction of the new Netcare Akeso Polokwane (77 beds) and Netcare Akeso Alberlito (87 beds) facilities has commenced. The Alberlito facility is expected to be commissioned in October 2025, with Polokwane in February 2026.  

Netcare will continue to maintain an optimal capital structure, and the strength of the statement of financial position and the ongoing improvement in operational performance in the underlying businesses will support dividend payments in line with the Group’s dividend policy, which seeks to return between 50% – 70% of adjusted headline earnings to shareholders. Additionally, the Group will return excess cash to shareholders by way of share buybacks.

Dr Friedland concluded, “Notwithstanding the competitive environment and fluid economic conditions, we anticipate continued improvements in both the operational and financial performance of the Group in H2 2024 and beyond.”



The Netcare Group (JSE: NTC) offers a unique, comprehensive range of medical services across the healthcare spectrum, enabling us to serve the health and care needs of each individual who entrusts their care to us. Our focus on implementing sophisticated digital systems will enable us to provide care that is fully integrated and an enhanced experience across our Group's operations. At Netcare, we are striving to change healthcare for the better. In addition to its world-class acute private hospital services, Netcare provides:

  • radiosurgery, radiotherapy, chemotherapy, bone marrow transplant and robotic-assisted surgery through Netcare Cancer Care;
  • primary healthcare services through Netcare Medicross;
  • emergency medical services through Netcare 911;
  • occupational health and employee wellness services through Netcare Occupational Health;
  • mental health and psychiatric services through Netcare Akeso;
  • innovative solutions to increase access to quality and affordable private healthcare through NetcarePlus; and
  • renal dialysis services through National Renal Care (NRC).

Netcare is also a leading private trainer of emergency medical and nursing personnel in the country.

For more information visit

Issued by:       MNA on behalf of Netcare
Contact:          Martina Nicholson, Meggan Saville, Estene Lotriet-Vorster or Clementine Forsthofer
Telephone:      (011) 469 3016
Email:              [email protected], [email protected], [email protected], [email protected] or [email protected]