Netcare going full steam ahead despite NHI

Netcare has allocated R1.5 billion to capital expenditure for its 2025 financial year, despite the government’s plans to limit the role of private medical providers under its National Health Insurance (NHI) legislation.

Netcare is the largest private hospital network in South Africa, and recently released its interim results for the first half of its 2025 financial year.

For the six months through March 2025, Netcare reported group revenue of R12.68 billion, up 5.3% compared to the first half of its 2024 financial year.

The company’s operational costs in the period were down significantly compared to the prior year, with Netcare incurring operational expenses relating to strategic projects of R31 million, compared to R87 million in 2024. 

Netcare’s earnings from joint ventures increased by 38.9% to R25 million, compared to R18 million in H1 2024. This was driven by a strong performance in its National Renal Care division due to the growth of renal dialysis services.

The company’s profit for the period increased by 16.7% to R826 million, while its basic earnings per share grew from 48.7 to 59.3 cents, up 21.77%.

Netcare’s total capex, including strategic projects, amounted to R434 million for H1 2025, of which R54 million related to expansionary projects.

The group’s net debt increased slightly to R5.6 billion from R5.3 billion at 30 September 2024 due to the payment of ordinary dividends and share buybacks.

Positively, the company said lower levels of load-shedding across its facilities in H1 2025 resulted in a reduction in diesel costs from the use of generators. 

However, it said this benefit was largely offset by significant increases in electricity tariffs and, to a lesser extent, higher electricity utilisation from the national grid.

The company also commented on the signing of the National Health Insurance Bill in May 2024.

“Netcare has long recognised the pressing need to address the deficiencies and inequities in healthcare access and delivery in South Africa,” it said.

“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.”

It noted that, since the Bill’s signing and 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, the South African Private Practitioners Forum, the Hospital Association of South Africa, and the South African Medical Association,” it said.

“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.”

Looking forward, Netcare expects to continue its strong first-half performance in the second half of its 2025 financial year.

For FY 2025, the company expects revenue growth of between 5.0% and 6.0%. Total paid patient days are expected to grow by between 0.8% and 1.3%.

The company said it will continue to focus on operational efficiency and strategic innovation, streamlining processes to reduce costs, and investing in technology that enhances patient care and service delivery. 

“The increased activity and operational efficiencies are expected to support further EBITDA margin expansion, improved earnings and higher ROIC,” it said.

The company has estimated that its total capital expenditure for FY 2025 will be R1.5 billion.

Netcare declared an interim dividend of 36.0 cents per share for the first half of its 2025 financial year, up 20% on the prior year’s interim dividend.