Netcare Navigates Lower Volumes, Delivers Strong Profitability

Netcare Limited (JSE: NTC), a leading South African private healthcare provider, has experienced an 18% decline in its share price year-to-date, extending a two-year trend. However, a closer look at their recent financial results reveals a company adept at navigating challenges.  

Despite facing lower patient volumes, Netcare reported a solid performance for the first half of 2024 (H1 2024). Revenue grew 4.3% to reach R12 billion, and strong operational efficiency led to a 7.5% increase in profitability (EBITDA). This translated to a healthier bottom line, with earnings per share rising 5.8%. Notably, Netcare also boasted an improved return on invested capital (ROIC) of 10.9%, demonstrating the effective use of shareholder funds. To reward investors for their continued support, the company declared an interim dividend of 30 cents per share. 

Netcare’s success hinges on two key strategies: maximizing revenue per patient and controlling costs. In H1 2024, they achieved a 5.7% increase in revenue per patient, indicating their ability to adapt to changing market dynamics. So, while patient volumes dipped, Netcare’s focus on efficiency ensured financial stability. This begs the question: can Netcare sustain this impressive performance? With a focus on innovation and operational excellence, Netcare appears well-positioned to weather short-term headwinds and deliver long-term value for investors. 


Netcare is currently trading in a pronounced downtrend, positioned below its 100-day moving average. Recently, trading volumes began to wane, suggesting a potential shift in market dynamics. The share price traded in oversold Relative Strength Index (RSI) conditions, leading to a period of sideways consolidation within a rectangle pattern, indicating market indecision. This pattern is defined by resistance at R12.00 per share and support at R11.03 per share. 

Given Netcare’s upbeat earnings results, a breakout above the R12.00 resistance level could signal renewed buying interest, potentially leading to further gains. In such a scenario, the 100-day moving average could serve as a key point of interest for traders targeting the upside. Conversely, if bearish sentiment prevails, the support level at R11.03 per share could be retested, highlighting the importance of this level in maintaining the stock’s stability. 


Netcare’s robust performance amidst lower volumes and market challenges highlights its operational excellence. With revenue up 4.3%, EBITDA growth of 7.5%, and improved ROIC at 10.9%, a breakout above the R12.00 resistance could signal further gains. Conversely, support at R11.03 remains critical if bearish sentiment persists. 

Sources: Netcare Limited, Reuters 

Piece Written By Nkosilathi Dube, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.

Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.

CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.