Life Healthcare Group Holdings (LHC) H1 2025 earnings summary

Executive summary

• Revenue grew 8.1% year-over-year to R12.1 billion for the six months ended 31 March 2025, driven by strong activity in acute hospitals and complementary services, acquisitions, and tariff increases.

• Normalised EBITDA increased 5.9% to R1.86 billion, with margin expansion on a like-for-like basis and underlying improvements in core businesses.

• NEPS from continuing operations rose 9.1% to 49.0 cents per share; interim dividend increased 10.5% to 21 cents per share.

• Sale of Life Molecular Imaging (LMI) agreed for up to $400 million, with majority of proceeds to be returned to shareholders; disposal expected to close in H2-2025.

• Discontinued operations include LMI (pending disposal) and AMG (disposed in H1-2024).

Financial highlights

• Acute hospitals revenue up 6.7% to R10.3 billion; complementary services revenue up 40.8% to R1.17 billion.

• Occupancy improved to 68.6% (from 66.6%); PPD growth of 2.0%; theatre minutes up 2.9%.

• Free cash flow of R560 million, with strong cash generation from operations.

• Net debt to normalised EBITDA at 0.65x, well below covenant of 3.5x; undrawn bank facilities of R1.6 billion.

• Net loss attributable to equity holders was R2.2 billion, mainly due to a R2.9 billion fair value loss on the Piramal contingent consideration and absence of prior year’s R2.8 billion AMG disposal gain.

Outlook and guidance

• FY2025 capex expected at R2.3 billion, with continued asset base growth, new hospital projects, and 82 new beds to be added.

• Southern Africa business targets occupancy of 70% and PPD growth of ~1.5%.

• Diagnostics business to expand with new transactions and PET-CT sites in H2-2025.

• Focus on operational efficiencies, asset optimisation, and integration of acquired renal dialysis units.

• LMI transaction expected to close in H2-2025.