Trading Day – Life Healthcare Group earnings decline

Life Healthcare Group was dragged down by its international operations. EBITDA declined by 0.2%, and headline earnings per share (HEPS) declined by 4.5%.

The Group’s Southern African hospitals and complementary services segment took advantage of its operating leverage to turn its 6% revenue growth into EBITDA growth of 18%.

Premier Fishing and Brands managed to turn their year profitable despite a decline in revenue driven by weak catch rates in the company’s squid segment.

US markets were down as the S&P 500 closed 0.8% lower, and the Nasdaq fell 1.5%.

The Nikkei 225 is down 0.4% in early morning trade, while the Hang Seng index dropped 2.1%.

Nvidia’s revenue fell by 17%, but its data centre growth remains strong.

Here is the biggest news of the day.

• Life Healthcare Group’s international operations dragged down earnings despite strong local performance. Revenue for the year ended in September rose by 5% to R28.2 billion, R20 billion of which came from Southern Africa. Southern African hospitals and complementary services saw a strong rebound after Covid with operating leverage allowing the company to turn a 6% revenue growth to an 18% growth in EBITDA in this segment. However, a 12% decline in their international operations’ EBITDA led to normalized EBITDA from continuing operations, declining 0.2% to R5.04 billion for the Group as a whole. Headline earnings per share (HEPS) declined 4.5% to R1.06. The company declared a final cash dividend of R0.20 per share, bringing the total dividend for the year to R0.40.

• Premier Fishing and Brands managed to turn their year profitable despite decline in revenue. Revenue for the year ended August declined by 17% to R475 million, mainly driven by reduced catch rates in the company’s squid segment, which was experienced industry-wide. Headline earnings per share (HEPS) changed from a loss of 3.4 cents last year to a profit of 5.7 cents this year. The board of directors decided to prioritize cash preservation in the business and therefore did not declare a dividend.

• Grindrod Shipping experienced a decline in earnings for the quarter. Headline earnings per share (HEPS) declined by 49% from last year to $1.17. Revenue came in at $107.2 million.

• Nvidia revenue fell 17%, but data centre growth remains strong. Earnings per share (EPS) for the quarter missed expectations of $0.69, coming in at $0.58. Although revenue declined sharply, the $5.9 billion delivered still beat analyst estimates of $5.8 billion. Gross margin was down 11.6% to 53.6%, which the company attributed to taking an inventory charge because of low demand for data centre chips in China. Nvidia expects its gross margin to recover between 63.2% and 66.0% in the next quarter. Nvidia’s data centre business reported $3.83 billion in sales, up 31% year-over-year.

• BlockFi, Gemini, and Genesis announced new restrictions as FTX contagion spreads. The lending arm of the crypto investment bank Genesis Global Trading is pausing redemptions and new loan originations. The Winklevoss brothers’ Gemini exchange said it was pausing withdrawals on its interest-bearing Earn accounts as a result of Genesis’ changes. Genesis is the lending partner for that program. BlockFi is reportedly preparing for a potential bankruptcy filing and has already halted withdrawals of customer deposits and admitted that it has “significant exposure” to FTX and its sister trading house, Alameda Research.