News

Salient features

• 20.0% increase in adjusted HEPS to 58.8 cents
• 5.3% increase in Group revenue to R12 677 million
• 8.3% growth in normalised Group EBITDA
• 10.7% growth in normalised Group operating profit, demonstrating strong operating leverage
• 50 basis point improvement in EBITDA margin 
• R473 million invested in share buybacks in H1 2025
• 20.0% increase in interim dividend of 36.0 cents per share
• R984 million returned to shareholders in ordinary dividends and share buybacks in H1 2025 

The Netcare Group, which provides innovative, quality healthcare across South Africa, has delivered a strong set of results for the six months ended 31 March 2025. This has been achieved despite a constrained and competitive operating environment.

The Group’s adjusted headline earnings per share (HEPS) increased by 20.0% to 58.8 cents for the six months ended 31 March 2025 (H1 2025) as compared to 49.0 cents in March 2024 (H1 2024 or prior period).

Netcare CEO, Dr Richard Friedland, commented, “Netcare’s solid results for H1 2025 reflect the Group’s continued focus on delivering strong and consistent operational and financial performance, with activity being influenced by the timing of Easter and the school holidays”. The holidays fell in April 2025 (second half) compared to March 2024 (first half) in the prior period. Resultantly, total paid patient days (PPD) for H1 2025 increased by 1.1% compared to the prior period, comprising a 1.4% increase in acute PPD1 and a 1.3% decrease in mental health PPD.

Continued emphasis on operational efficiencies, the realisation of enhanced digital benefits, and lower strategic and diesel costs collectively contributed to strong operating leverage, resulting in a 10.7% increase in operating profit over the prior period. Normalised operating profit increased to R1 663 million; normalised profit before taxation was higher at R1 154 million (H1 2024: R1 000 million).

The Netcare Board of Directors has declared an interim dividend of 36.0 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 programme. A total of 35.6 million ordinary shares were acquired in the market between 1 October 2024 and 31 March 2025 at an average price of R13.20 per share. A further 10.3 million ordinary shares have been purchased post 31 March 2025 at an average price of R12.75 per share. Since the commencement of the share buyback programme in September 2023, Netcare has bought back 130.7 million shares (9.1% of total ordinary shares in issue at 30 September 2023), at an average price of R12.56 per share. 

Financial Overview
Group revenue for H1 2025 increased by 5.3% to R12 677 million (H1 2024: R12 034 million), and normalised Group EBITDA for H1 2025 improved by 8.3% to R2 347 million (H1 2024: R2 167 million). Group EBITDA margin increased by 50 basis points to 18.5% from 18.0% in H1 2024.

Total Group capex, including strategic projects, amounted to R434 million for H1 2025, of which R54 million related to expansionary projects. Total capital expenditure for FY 2025 is estimated at R1.5 billion.

At 31 March 2025, the Group‘s cash resources and available undrawn committed facilities amounted to R2.3 billion.

Group net debt (exclusive of IFRS 16 lease liabilities) increased slightly to R5.6 billion from R5.3 billion at 30 September 2024 due to the payment of ordinary dividends and share buybacks.

Strategic Update
The Group’s strategic projects gained further traction in H1 2025, making a meaningful contribution to the advancement of Netcare’s long-term objectives.

The ‘Digitally Enabled’ first phase of the Group’s strategy was successfully completed in FY 2024. As a result, no further strategic costs were incurred in H1 2025, with all related operational costs now fully integrated into the cost base of the Hospital Division.

Person centred health and care: Netcare’s 10-year strategy is fundamentally reshaping the way it delivers health and care. Anchored in response to three global healthcare megatrends of customer centricity, digitisation, and data-driven care, the strategy capitalises on the Group’s unique, integrated ecosystem of assets and services to create a more connected, efficient, and responsive healthcare experience.

The strategy is structured around three core phases of being digitally enabled, data driven, and ultimately person centred. Substantial progress has been made in executing this vision, firmly positioning Netcare at the forefront of healthcare innovation and ensuring the long-term delivery of sustainable value to all stakeholders.

The current success from the completion of the first digitisation phase lays a robust foundation for the second and third phases, which are now well underway and will unfold over the coming years. 

Dr Friedland commented, “In our data driven second phase, we are developing capabilities in predictive analytics and have made significant progress, with the South African Health Products Regulatory Authority (SAHPRA) approving our algorithm for the early detection of sepsis (blood stream infections) in ICU patients. This innovation enables earlier clinical interventions and meaningfully enhances patient care and outcomes.

“In addition, an advanced analytics platform has been deployed, equipping clinical teams with real-time, actionable insights. Beyond the substantial clinical and patient benefits, this capability positions the Group to reduce the cost per clinical event, reduce morbidity and mortality rates, and improve overall efficiency.

“Going forward, our clinicians will benefit from the integration of Generative AI and Natural Language Processing tools, which will streamline the publication of large-scale clinical research. This supports our clinicians’ leadership in medical and surgical research and reinforces our commitment to upholding the highest standards of clinical excellence in South Africa.”

The third phase of the transformation focuses on ‘person centred health and care’ and is being rolled out over the next three to four years. This initiative will empower patients with direct access to their health records, enabling more meaningful engagement in their care journey and ensuring that care delivery is deeply aligned with their individual needs and preferences.

Netcare Akeso: Demand for quality mental healthcare services continues to grow, and the Group remains firmly committed to expanding access and pursuing new opportunities in this vital space. Construction of the Netcare Akeso Polokwane facility (87 beds) is advancing well and remains on track for commissioning in March 2026. In response to the significant and increasing need for mental health support in the broader Tshwane region, the Group will also be commissioning the new Netcare Akeso Montana facility (88 beds) in October 2026. Furthermore, the Netcare Akeso Alberlito facility (80 beds) is scheduled to open its doors in March 2027, strengthening the group’s national footprint and reinforcing its dedication to meeting the mental healthcare needs of communities across South Africa.

Promoting access to healthcare: Sales of NetcarePlus products to the retail and corporate segments maintained strong momentum and growth, expanding access to private healthcare beyond traditional medical scheme membership, broadening the addressable market and driving incremental patient volumes into the Netcare ecosystem. Similarly, NetcarePlus GapCare products continue to enhance patient retention in hospitals where Netcare is not a designated provider.

Netcare Diagnostics: Netcare Diagnostics, in partnership with the Black female-owned pathology service provider Dr Esihle Nomlomo Inc., continues to show strong growth in revenue and the number of pathology tests performed. To date, four laboratories have been commissioned, along with the deployment of 124 blood gas analysers across Netcare’s ICU and High Care units. In addition, 127 point of care devices have been operationalised at 19 emergency departments, with plans to extend the service in H2 2025. The pathology service has also been introduced at 24 Netcare Medicross facilities, eight of which now offer point of care testing.

Environmental sustainability: Netcare completed the first phase of its 10-year environmental sustainability strategy in 2023, achieving a 39% reduction in energy intensity per bed. This resulted in a cumulative benefit of R1.5 billion in savings and cost avoidance, delivering an IRR of 40%.

The Group is now well advanced in Phase 2 of its strategy, which focuses on achieving net zero Scope 2 emissions by 2030 through a full transition to renewable energy sources. In addition, Netcare is targeting a combined 84.0% reduction in Scope 1 and Scope 2 emissions. This phase also places strong emphasis on waste, water and backup energy. Notably, a key objective is to achieve zero waste to landfill, alongside a 20.0% reduction in freshwater utilisation, of which 16.8% has already been realised since 2022.

Netcare’s renewable energy wheeling agreement with NOA Group Trading (a renewable energy trader) reached unconditional status in 2024. This agreement, involving wind power supply, now applies across the initial six facilities (FY 2024: five facilities) included in Phase 1 of the Group’s “100% Renewable Energy by 2030” initiative. These sites are on track to receive up to 100% of their electricity from renewable sources by September 2026.

The Group’s 2030 strategy (Phase 2) is focused on delivering continued financial efficiencies through modest capital investment, while advancing its longer-term ambition of achieving net zero emissions by 2050.

Netcare continues to set the benchmark for sustainability in the healthcare sector and remains firmly positioned as the market leader in environmental stewardship. In a groundbreaking initiative, marking yet another first for the South African healthcare industry, the Group is piloting an anaerobic digestion plant at Netcare Alberton Hospital. This innovative system transforms food waste into methane, which is then captured and converted into usable energy for the facility, further reducing the Group’s environmental footprint.

The Group’s commitment to sustainability extends well beyond operational practices and continues to receive international recognition. In 2024, Netcare was named runner-up in the prestigious Association of Energy Engineers (AEE) Corporate Energy Management International Award and received the Sub-Saharan Africa Regional Award, further underscoring Netcare’s leadership on the continent.

Building on this momentum, in April 2025, Netcare was honoured as the Global Winner of the AEE 2025 Corporate Energy Management International Award, presented at the World Energy Conference in Atlanta, USA. The award spans all sectors, not just healthcare.

Commenting on the accolades, Dr Friedland said, “This global recognition is a powerful testament to the pioneering work Netcare continues to deliver. These accolades reflect more than just technical excellence; they affirm our long-standing commitment to innovation, sustainability, and meaningful impact, not only within healthcare but across the broader global sustainability landscape.”

Transformation: Netcare remains firmly committed to transformation and contributing to society. The Group is a Level 3 B-BBEE accredited company. If Netcare was permitted to train the number of nurses it has trained historically, a Level 1 rating would be comfortably attained. Netcare remains the largest employer of disabled people in the healthcare sector and listed entities that employ more than 10 000 people.

Divisional Review
The hospital and emergency services division, which comprises acute and mental health hospitals as well as emergency and ancillary services, increased revenue by 5.5% to R12 347 million (H1 2024: R11 705 million). Total PPD increased by 1.1%, driven by a 1.4% increase in acute PPD, while mental health PPD declined by 1.3% in line with expectations.

Aligned with broader sectoral trends, medical cases continue to grow at a faster rate than surgical cases, with ongoing outmigration of lower-margin surgical procedures and declining maternity cases. While the industry-wide downturn in maternity volumes persists, the rate of decline within the Group's operations has moderated. Furthermore, although the Group’s innovative initiative to capture market share in the maternity segment is still in its early stages, performance in H1 2025 has been encouraging.

Higher volume growth from lower cost designated service provider network options, as well as data driven clinical efficiencies which were passed on to medical schemes, resulted in revenue per patient day (PPD) growth of 4.1% in H1 2025.

The average case severity remains above 2019 levels. However, the overall acute length of stay declined marginally to 4.4 days in H1 2025 (H1 2024: 4.5 days), with a higher increase in less severe medical admissions during the review period. Increased activity levels resulted in an improvement in acute occupancy to 63.1% (H1 2024: 62.1%).

Demand for mental health services remains robust. However, the temporary unavailability of beds at certain high occupancy sites for essential refurbishment work constrained capacity. Consequently, mental health occupancy levels decreased from 69.3% to 68.2%.

Normalised EBITDA for the hospital and emergency services segment increased by 8.1% to R2 266 million from R2 096 million in H1 2024. The Group granted admission rights to a net 64 specialists across its acute and mental health facilities during H1 2025.

Primary care division: Medical and dental visits declined by 0.9%, reflecting the constrained consumer environment. This resulted in revenue being flat when compared to the prior period. Despite this, EBITDA increased by 14.1%, driven by ongoing operational efficiencies.

NHI: Netcare has long recognised the pressing need to address the deficiencies and inequities in healthcare access and delivery in South Africa. As the country’s largest private hospital services provider, the Group is well positioned to support the government's efforts to expand access to quality healthcare for all South Africans. 

In May 2024, the President signed the National Health Insurance (NHI) Act into law. Despite ongoing concerns and anticipated legal challenges, the Minister of Health published the first draft regulations under the NHI Act on 6 March 2025, inviting public comment over a three-month period.

Several legal actions have since been initiated against the NHI Act by various stakeholders, including Solidarity, the Board of Healthcare Funders (BHF), the South African Private Practitioners Forum, the Hospital Association of South Africa (HASA), and the South African Medical Association.

Dr Friedland commented, “We believe that a collaborative partnership between the public and private sectors is essential to developing sustainable and affordable solutions that advance the goal of universal healthcare. Notwithstanding these legal proceedings, Netcare remains committed to constructive engagement and stands ready to work in partnership to meaningfully reform and strengthen South Africa’s health system.”

Outlook and Guidance
The broader operating environment remains challenging. Formal sector employment levels have yet to show meaningful improvement, and persistent global uncertainty, along with escalating geopolitical risks, could further dampen GDP growth, impact the country’s macroeconomic outlook, and erode investor sentiment.

“Despite the challenges, we are reassured by the strong increase in new members over the past year within one of the largest restricted medical schemes. Furthermore, demand for high-quality private healthcare remains underpinned by an ageing insured population and consistent increases in the burden of disease,” said Dr Friedland.

“We are confident that our differentiated strategy, anchored in person centred health and care that is digitally enabled and data driven not only strengthens our ability to navigate a challenging macroeconomic environment and maintain relevance in the restricted network space, but also positions the Group to continue delivering sustainable earnings growth and meaningful returns for our shareholders.

“While the recent interest rate cuts have provided some relief, consumers continue to face financial pressures, reinforcing the shift in preference towards more affordable, restricted network plans. Our extensive geographic footprint, together with our NetcarePlus GapCare offering, strategically positions us to maintain a meaningful share of patient volumes within these cost-conscious networks,” he added.

The Group remains committed to managing overall financial performance by carefully balancing the key drivers of price and volume, thereby supporting margin protection and enhancing growth. This alignment with evolving consumer demand ensures that the Group remains accessible and competitive within an increasingly price-sensitive environment.

Dr Friedland concluded: “We are encouraged by our performance in H1 2025 and remain on track to achieve the guidance as published in our FY 2024 results. We will continue to focus on operational efficiency and strategic innovation, streamlining processes to reduce costs, and invest in technology that enhances patient care and service delivery.”

For FY 2025, the Group expects revenue to grow between 5.0% and 6.0%. Total PPD are expected to grow between 0.8% and 1.3%.

Ends.

Editors notes

About Netcare
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.

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