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Life Healthcare's vision is to be a global, people-centred, diversified healthcare organisation with solid fundamentals and a distinct, high-quality asset portfolio that positions us for sustainable growth.
Chairman
Mustaq Brey
This has been a unique year with many complexities. We continue to operate in a challenging operating environment characterised by changing demographics, increasing cost of care, evolving technology, growing consumerism and ongoing shortages of scarce skills. Elective surgeries have significantly declined with the start of COVID-19, in line with most developed countries. In addition, we experienced a cyber-attack on our IT systems in southern Africa and executive leadership changes. The impact of these events was managed by various efficiency, growth, quality and sustainability initiatives across the Group, while consistently delivering excellent care to all our patients.
We operated in two distinct periods during 2020. Life Healthcare achieved strong results during the first half of the year, driven by the momentum of the various initiatives we implemented during our previous financial year. From March 2020, however, our operating environment was dominated by the impact of the
COVID-19 pandemic.
Our management team, as well as our employees across the countries in which we operate, demonstrated phenomenal resilience during the year as we navigated several challenges and transitioned into new ways of working. Our employees have truly gone the extra mile, with our nurses, frontline employees, doctors and management demonstrating exceptional courage and commitment in the face of extremely challenging conditions.
Despite the rigorous safety procedures implemented throughout our operations, tragically, 19 employees lost their lives while protecting and saving our patients. Our condolences go out to their families and friends during this sad time. Life Healthcare remains unequivocally committed to protecting our employees. As part of this, we further strengthened our wellness initiatives to ensure our employees are equipped to handle the added stress and uncertainty brought on by this year. In addition the management team and Board contributed to a fund set up to assist our employees with financial assistance where needed. We have also contributed to the financial arrangements where employees unfortunately passed away.
In southern Africa, we remained committed to delivering the best medical care to our patients and, as the COVID-19 crisis unfolded, the business continued to prove its agility and resilience. Throughout the second half, our facilities attended to the demands driven by COVID-19 while also responding to essential surgeries and ensuring the availability of critical medical equipment. To this end, we were able to transfer our employees and equipment to areas in the country with extra demand, thereby supporting the country's response to the pandemic.
Unfortunately, our southern African operations fell victim to a criminal cyber-attack on our IT systems. It is important to note that our patient care was not impacted, and we continued providing quality healthcare across all our hospitals and clinics. We acted immediately and took proactive steps to contain the attack. In line with our business continuity plans, our hospitals and administrative offices switched to manual backup processing systems and continued to function. We thank our patients and other stakeholders for their understanding, support and patience and apologise for any frustration, delay or distress this has caused.
The robust performance during undoubtedly the most challenging time in our history is testament to the strength of our strategy. In southern Africa, our complementary and employee health services held up exceptionally well during the second half of the year. Internationally, in Alliance Medical, patient volumes declined sharply during the initial stages of the pandemic, but have subsequently recovered strongly. Pleasingly, through our refurbishment programme in the UK, we completed vital upgrades to three of our cyclotrons. Our fifth cyclotron site, which opened in September, will begin commercial production during quarter one 2021, and will further enable us to serve the market's growing demand. I truly believe that we have a unique, diverse portfolio of assets across the Group.
In a year dominated by COVID-19, we had to reflect on the future role we want to play in the healthcare industries of the countries in which we operate. While we believe that Life Healthcare's strategy remains sound in the current context, we are busy adapting for a post-COVID-19 world to ensure a sustainable future.
It is important to note that the core of our strategy has not changed. Patient care, as well as the safety and wellbeing of our employees, remained our first priority. However, certain growth initiatives – such as our entry into the diagnostic imaging market in South Africa – while delayed during the year, experienced encouraging traction during quarter four. As such, this year, we largely concentrated on our quality, efficiency and sustainability drivers.
Our vision to be a global, people-centred, diversified healthcare organisation will continue to be the driving force in everything we do. Technology, data analytics, diversity and inclusion will be the enablers that underpin the execution of our strategy.
We believe that partnerships between healthcare providers and governments are critical to finding solutions for the challenges faced by our industry globally. In South Africa, given the enormity of healthcare challenges facing our country, the outbreak of COVID-19 emphasised the importance of engagements between the public and private sectors. We believe healthcare providers have a moral obligation to engage, cooperate and partner with government to find solutions and support the fundamental principle of universal healthcare coverage.
Our regulatory environment in southern Africa continues to be a complex and challenging environment. The industry also faces increasing costs of healthcare delivery without significant improvement in health outcomes.
We believe that the experience of our international operations – where government-led healthcare systems are the norm – will be invaluable in navigating the future of the healthcare industry in southern Africa. In all of the regions where we operate, we understand that effective and excellent healthcare depends on strong, long-lasting relationships.
There are no grey areas when it comes to corporate governance, and we continue to embed a culture of honesty, integrity and responsibility throughout the Group. We expect the best from ourselves to continue strengthening excellent governance processes at all levels.
In 2020 we implemented a Group-wide governance framework, which enables us to have a global perspective on our operations. We have a dedicated compliance function to help us drive the reporting and adherence to governance and regulatory compliance.
Succession planning continues to be high on the Board's agenda, and the Group underwent significant leadership changes during the year. In January 2020, Dr Shrey Viranna stepped down as CEO for personal and family reasons. During his tenure, Shrey displayed impeccable leadership, together with strong industry insight and stakeholder interaction. On behalf of the Board, I extend my gratitude to Shrey for his invaluable contribution, and wish him all the best on the next phase of his personal journey.
Following Shrey's departure, Pieter van der Westhuizen was appointed as acting CEO while also retaining his role as CFO. Pieter has been with Life Healthcare for over 20 years, and has vast experience in the industry in which we operate. He provided the immediate strategic, operational and leadership continuity that we needed, and displayed exceptional personal courage and determination as he guided the organisation through the challenges of COVID-19 and the cyber-attack. I would like to thank Pieter for his continued commitment and dedication.
Following an extensive search, we appointed Peter Wharton-Hood as CEO. He is a seasoned and proven business leader, with strong global experience in strategy and operational delivery in complex and ever-changing environments. I am delighted to welcome Peter to Life Healthcare, and believe that his experience and expertise will prove invaluable to the continued success and sustainability of the Group.
As Chairman, I have had the privilege of engaging with various stakeholder groups during the year. A large part of this was to ensure our employees remain motivated and resilient during this tough year. Our teams have risen to the challenge posed in 2020, with the outcomes of these efforts reflected in the improvement of our clinical quality metrics. I continue to receive positive personal feedback from those who have been treated at our facilities.
As a Group, we remain committed to fair and transparent remuneration. Post our 2020 AGM, we engaged with our shareholders to address matters of interest and continue to be proactive in our engagement with institutional investors.
A crisis can bring out the best in people, and I certainly believe this is true of our Board and executive management. Engagements between the Board and management increased substantially during this period of strife, further strengthening working relationships across the Group. Our Board had weekly meetings with our management, providing a sounding Board and contributing to constructive discussions on Life Healthcare's approach to dealing with the pandemic. I am proud of the ethical and accountable leadership team we have in place to deliver a robust, sustainable long-term business.
I believe that Life Healthcare is in a favourable position to create value for our stakeholders going forward. We have built a solid foundation over the past few years – one that we can harness to drive our growth and expansion in the years ahead. Furthermore, the insights we have gained from our investment in Alliance Medical will be critical to a successful entry into imaging in South Africa.
While COVID-19 will remain part of our operating environment for the foreseeable future, the Group is prepared to deal with any challenges that may arise. With the added regulatory requirements around COVID-19 comes additional cost, however we will continue our endeavours to return to and exceed previous operational levels.
The pandemic also ushered in a new landscape that we all had to navigate, and certain learnings and best practices have become part of Life Healthcare's new normal. As we deal with these uncertainties, we remain committed to serving our patients in the best way possible – putting their health and safety first.
I want to end by expressing how extremely proud I am to have been given the chance to lead the Company as Chairman of the Board over my leadership tenure, as I will be stepping down at the forthcoming AGM. It truly is a privilege to be part of Life Healthcare's history, and I am excited to follow the Group's journey in the years ahead under the leadership of Dr Victor Litlhakanyane, whose industry knowledge and skills will certainly add significant value.
To our Board, thank you for your ongoing commitment during this turbulent year.
To our senior management and my fellow Board members, thank you for your unwavering commitment to always doing what is right for the Group and keeping our stakeholders front-of-mind. I want to specifically thank Pieter, who has been a galvanising force during this turbulent year – not only in leading the executive through the pandemic to ensure we continue to deliver to our patients, but also in dealing with the cyber-attack.
To our patients, thank you for your continued support. To our employees, healthcare specialists, support services and doctors across the world, thank you for your loyalty and dedication over the past year – you have done us proud, and I am honoured to have been a part of this dynamic team.
Mustaq Brey
Chairman