FIFI PETERS: Well, dividends are back to the present at Netcare. This after the private hospital group reinstated its interim dividend of 34 cents in the six months through September, than when the group made a profit in the period of an earlier loss, even though we saw the deadly Delta variant that brought in some Profits. of its tightest locks, and also some of the toughest restrictions we’ve seen since 2020 when the pandemic first broke out.
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We have Netcare CEO Dr. Richard Friedland joining the market update for more information. Richard, it’s good to meet you again, sir. [The fact] you are paying a dividend, can this be read as a sign that the worst threat from a Covid-19 perspective is behind you?
RICHARD FRIEDLAND: Well, we certainly hope it’s left behind. But Covid has humiliated us all, making sure we don’t forecast too far in advance. The textbook has not been written about Covid, so we are cautiously optimistic.
The reason we pay dividends is that we generate a lot of cash. We were able to retire debt and reduce our debt levels. Our debt to Ebitda ratio is now at previous levels of 1.7; Our working capital was particularly good and our dividend policy has always been to return 50% to 70% of profits to shareholders. In this case, we returned 50%.
FIFI PETERS: Revenues have also increased quite a bit, 13% in the period. What services were you able to perform this time that you were unable to perform at the start of the pandemic because most of your beds were assigned to treat Covid-19 patients?
RICHARD FRIEDLAND: Right, Fifi. At the beginning of the pandemic and wave one, 80% of our beds were assigned and dedicated to Covid; about 62% in the second wave and almost 50% in the third wave.
So we’ve seen a nice comeback from elective surgery and non-Covid-related activity, and that can last a long time. But again, it all depends on the various scenarios around Covid in the new year.
FIFI PETERS: What does the team look like? I remember at first there was a shortage of personal protective equipment and ventilators. What does the offer currently look like?
RICHARD FRIEDLAND: Well funnily enough Fifi, we certainly have enough supplies and would you believe this idea that Covid spreads on surfaces or fomite has been proven wrong? We can probably argue that the billion spent on EPP was probably not necessary. The most important thing to prevent Covid is to wear a mask and potentially a visor in the hospital. All of these spacesuits were probably less effective, we know that only in hindsight. And then obviously the vaccine is the most effective. So the whole way we treat and address Covid has changed in the last 18 months.
FIFI PETERS: Just about the vaccine, please tell us about the situation in your hospitals in terms of the vaccines you are administering. But let’s talk now about booster shots – how Netcare is preparing for that.
RICHARD FRIEDLAND: Well, first of all, more than 85% of our staff are vaccinated and we want to increase that even more. Clearly, for those who don’t want to have a vaccine, we have to really understand what it is all about and commit to them, and we are currently doing that. I believe that Covid vaccine boosters will become the norm as we try to move from a state of pandemic disaster and these terrible waves to an endemic state where, like the flu virus, you contract it every year. And if you want to get vaccinated, a vaccine is available. So I think the drivers are here to stay, but that’s a positive thing.
FIFI PETERS: Another challenge during the pandemic, Richard, was obviously the shortage of staff and those in the hospitals, the fact that they were so exhausted due to lack of capacity. How do you see the situation around staffing now?
RICHARD FRIEDLAND: Well, Fifi, you make a very important point. I think there is generally a skills shortage in our country and it is exacerbated in the healthcare environment because our government has changed the curriculum around training and not accredited private facilities. Now we are training a third of the number of nurses that we trained three or five years ago. We were training 3,500 nurses; We are [now] training just over 1,000. Therefore, there is an endemic shortage of nurses. I would say that the vaccine has helped enormously so that people no longer get sick and have to quarantine themselves, so that is helping us.
FIFI PETERS: But the fourth wave? I was reading an article before the show started; I think we are seeing about 800 cases registered in the last 24 hours, and it is indicative that the fourth wave is here. How is Netcare prepared for this?
RICHARD FRIEDLAND: Well, we have learned many lessons and we are prepared. I would say that all the cases that we are seeing in our hospitals right now are from patients who are not vaccinated. So if you get a vaccine, it won’t prevent you from contracting Covid, but it will certainly prevent you from contracting the severe form, which requires hospitalization and potentially causes death.
So, all of our cases currently in our ICU and high care are those of patients who have not been vaccinated. I think that’s the key message here. Folks, we all have to go out there and make sure we’re vaccinated and getting boosters.
FIFI PETERS: I think there is no better mouth to come out than a doctor’s, sir. But we will leave it there. That was Netcare CEO Dr. Richard Friedland who broke down the numbers and emphasized the importance of receiving your jab.