Netcare Limited

For the 6 months ended 31 March 2026, revenue increased 4.8% to ZAR 13.3 billion, EBITDA rose 6.6% to ZAR 2.5 billion, and EBITDA margin improved 30 bps to 18.8%. Operating profit rose 7.4% to almost ZAR 1.8 billion, profit after tax increased 11.9% to ZAR 924 million, HEPS was ZAR 0.716 (+21.2%), and adjusted HEPS was ZAR 0.717 (+21.9%). Net debt was ZAR 6.1 billion and net debt-to-EBITDA remained 1.2x; ROIC improved to 12.4% from 11.9%. For the hospital segment, revenue grew 5.2% to ZAR 13 billion and EBITDA grew 7.2% to ZAR 2.4 billion, while the Primary Care division’s revenue fell 10.1% to ZAR 303 million and EBITDA fell 11.1% to ZAR 72 million. Management expects full-year FY2026 acute patient days to grow 0.3% to 0.8%, total patient days 1.1% to 1.6%, and group revenue 4.0% to 4.8%; all other guidance remains unchanged, including normalized EBITDA margin expected to benefit from efficiencies, and FY2026 CapEx is guided at ZAR 1.9 billion including ZAR 566 million expansionary CapEx.

Richard Friedland framed the half-year as proof that Netcare’s long-term strategy is compounding, especially digital, data, AI, and sustainability projects. He emphasized that the business sits at the intersection of clinical credibility, digital capability, and patient trust, and said the company is in the middle of a 10-year transformation journey with Phase 1 complete and Phases 2 and 3 progressing. His tone was notably confident and forward-looking, with repeated emphasis that the “digital dividend” is still expanding and that clinical AI is already becoming operational infrastructure.

Keith Gibson said Netcare delivered solid operating leverage despite a low-growth backdrop, converting 4.8% revenue growth into 6.6% EBITDA growth and 7.4% operating profit growth. He highlighted a healthy balance sheet, with net debt of ZAR 6.1 billion, cash of about ZAR 2 billion, committed undrawn facilities of just over ZAR 1 billion, and net debt-to-EBITDA at 1.2x; he also noted gross debt of ZAR 8.1 billion. Capital allocation remained shareholder-friendly: ZAR 2.4 billion has been spent buying back 181.7 million shares since the program began, ZAR 448 million of CapEx was invested in the half, and the interim dividend is ZAR 0.44 per share, equal to 61.4% of adjusted HEPS. He also pointed to lower debt costs, with cost of debt at 8.1% at the half year-end versus 8.8% a year ago.

The main analyst question was about refinancing timing, and Keith said there are no debt maturities in H2 2026, with the nearest maturity in December. Another question focused on the impact of medical scheme benefit changes on patient days and the health of specific schemes; Melanie Da Costa said the pressure is not broad-based, but concentrated in a few publicly known schemes, and that management’s best assessment of the impact is already reflected in guidance. She added that one scheme appears more stable after contribution increases, while another has tightened underwriting rules.