Netcare resumes dividend as it swings back to profit

Netcare, a private hospital group, has made a remarkable comeback in the 2021 financial year, swinging from a loss to a profit and resuming annual dividends at 34 cents per share. In an exclusive interview with CNBC Africa, Netcare's CEO, Dr. Richard Friedland, shared insights into the group's performance and the key lessons learned from navigating the challenges of the COVID-19 pandemic. Dr. Friedland emphasized the importance of humility in the face of the ever-evolving scientific understanding of the pandemic, highlighting the need for flexibility and adaptation in response to new information. One of the key takeaways from the experience was the ability to rapidly diagnose COVID-19 cases, leading to a more efficient use of hospital beds as the waves progressed. In the first wave, 80% of beds were dedicated to COVID patients, compared to around 50% in the third wave, showcasing the group's ability to optimize resources in response to changing circumstances. Dr. Friedland also discussed the ongoing vaccination efforts within Netcare, with over 85% of staff and contractors vaccinated to date. However, he stressed the importance of increasing vaccination rates to transition from a pandemic to an endemic state, where COVID-19 becomes more manageable like the seasonal flu. The interview also touched upon Netcare's financial strategy, with a focus on debt reduction and cash generation. Dr. Friedland highlighted the group's commitment to returning excess cash to shareholders and emphasized the importance of maintaining low debt levels to support future growth and investments. When asked about potential acquisitions, Dr. Friedland clarified that Netcare's focus is now on digital transformation and IT investments, rather than expanding through new purchases. The group's significant investments in digitizing healthcare systems aim to enhance access to medical services, particularly for underserved populations. Netcare's new division, NetCare Plus, is dedicated to improving access to quality healthcare at affordable rates, bridging the gap between the public and private sectors. Additionally, Dr. Friedland shared Netcare's proactive approach to environmental sustainability, with a long-term plan to reduce energy consumption, water usage, and waste. The group has already achieved a 28% reduction in energy footprint and is committed to further targets for 2030, including zero waste to landfill and sourcing all energy from renewable sources. Netcare's ambitious sustainability strategy underscores its dedication to environmental stewardship and responsible business practices. Overall, Netcare's resurgence marks a testament to its adaptability, resilience, and commitment to delivering high-quality healthcare while addressing broader societal and environmental challenges.