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Life Healthcare impairs its Polish operations

November 17, 2020

JOHANNESBURG - LIFE HEALTHCARE said yesterday that it had received an offer for its Polish operation, Scanmed, but at a lower price than its carrying value of R1.5 billion at the end of September.

The group said with the receipt of the offer, it was considered prudent and appropriate to further impair the carrying value in September to reflect the value of the offer.

“The additional impairment is approximately R635 million, resulting in a total impairment for the year to end September, relating to Scanmed, of approximately R795m. The adjusted carrying value of Scanmed, after the additional impairment, is approximately R840m,” the group said.

Life Healthcare added that the disposal of Scanmed was in line with its strategy and the disposal of Scanmed was subject to regulatory approvals in Poland.

Life Healthcare said the proceeds for the disposal would be used to reduce its debt. In the trading update released last week, the group expected its earnings per share (Eps) for the year to end September to decline by between 77.3 and 80.2 percent.

The group said the additional impairment will reduce the Eps ranges provided in the trading statement last week.

The group now expected its Eps to decline by more than 100 percent compared to last year.

“The impairment is excluded from headline earnings per share (Heps) and normalised earnings per share (Neps), and therefore no changes to previous ranges in respect of Heps and Neps have been provided,” the group said.