By Tiisetso Motsoeneng
JOHANNESBURG (Reuters) - Mediclinic (L:MDCM) took a hefty $863 million (646.28 million pounds) writedown on its Swiss business on Thursday, tipping South Africa's biggest private hospital group into an annual loss and sending its shares tumbling.
A constituent of London's FTSE 100 index with a secondary listing in Johannesburg (J:MEIJ), Mediclinic has faced stricter regulations in recent years in Switzerland that have hobbled growth.
The company said it wrote off 84 million pounds ($113 million) from the value of property and 560 million pounds from the value of intangible assets at Hirslanden, which runs Switzerland's biggest private hospital network.
The charges swung the company into an operating loss of 288 million pounds in the year ended March compared with an operating profit of 362 million pounds a year earlier, filings with the stock exchange showed.
"If you strip out these charges, which should be a one-off thing, their operational results were not too bad. But the market does not like these impairments," said one Johannesburg analyst, who declined to be named because he is not allowed to speak to the media.
Shares in Mediclinic, whose core profit, or EBITDA, inched up 3 percent to 522 million pounds, skidded 8.2 percent in Johannesburg, on course for their biggest daily percentage fall since November 2016.
Founded in 1983 in Stellenbosch, South Africa, Mediclinic has transformed itself from a southern African player to one of the biggest private healthcare providers in Europe, the Middle East and Africa with a market capitalisation of nearly $7 billion.
Outgoing Chief Executive Danie Meintjes, at the helm for nearly a decade, extended the company's footprint in the Middle East with the acquisition two years ago of Al Noor Hospital to offset slower growth at home and in Switzerland.
He tried and failed to buy the remaining 70 percent of Britain's Spire Healthcare (L:SPI) last year after failing to agree on the price in a deal that would have given it a substantial footprint in one of Europe's biggest economies.
"We still believe that it (Spire) is a good business. We think it is good market and will continue to be a supportive shareholder," Meintjes said in a telephone interview with Reuters on Thursday. He declined to comment on whether Mediclinic would launch a fresh bid for Spire.
Meintjes will be replaced by two-decade company veteran Carel Aron van der Merwe when he retires later this year.