Latest news with #NMFC
Business Wire
04-08-2025
- Business
- Business Wire
New Mountain Finance Corporation Announces Financial Results for the Quarter Ended June 30, 2025
NEW YORK--(BUSINESS WIRE)--New Mountain Finance Corporation (NASDAQ: NMFC) ('New Mountain,' 'New Mountain Finance' or the 'Company') today announced its financial results for the quarter ended June 30, 2025. Second Quarter and Recent Highlights 1 Net investment income of $34.5 million, or $0.32 per weighted average share Net asset value of $12.21 per share compared to $12.45 per share as of March 31, 2025 ~95% of the portfolio is rated green on our internal heatmap Increased senior oriented asset mix to 78%, compared to 75% as of June 30, 2024 Received a third license from the Small Business Administration for the SBIC program in July 2025 Repurchased $9.6 million of outstanding shares in the second quarter Declared a third quarter 2025 distribution of $0.32 per share, payable on September 30, 2025, to holders of record as of September 16, 2025 ($ in millions, except per share data) Q2 2025 Q2 2024 Net Investment Income per Weighted Average Share $ 0.32 $ 0.36 Regular & Supplemental Dividends Paid per Share in Quarter $ 0.32 $ 0.34 Annualized Dividend Yield 4 12.3 % 11.0 % Expand June 30, 2025 March 31, 2025 Investment Portfolio 5 $ 3,014.2 $ 3,047.7 NAV per Share $ 12.21 $ 12.45 Statutory Debt/Equity 3 1.17x 1.15x Statutory Debt/Equity (Net of Available Cash) 3 1.13x 1.09x Expand Management Comments on Second Quarter Performance 'In Q2, NMFC once again delivered its dividend, despite tight credit spreads in the market generally,' said Steven B. Klinsky, NMFC Chairman and New Mountain Capital CEO. 'We remain committed to maintaining credit discipline and serving our shareholders.' John R. Kline, NMFC CEO, added: 'We continued to advance our strategic priorities for NMFC of both increasing the percentage of senior-oriented assets to nearly 80% and building more position diversification across the portfolio. Additionally, NMFC repurchased $9.6 million worth of shares in the quarter, demonstrating our belief that the stock is undervalued at current trading levels.' Portfolio and Investment Activity 5 As of June 30, 2025, the Company's NAV 1 was $1,305.9 million and its portfolio had a fair value of $3,014.2 million of investments in 124 portfolio companies, with a weighted average YTM at Cost 6 of approximately 10.6%. For the three months ended June 30, 2025, the Company originated $122.2 million of investments 2, offset by $141.4 million of repayments 2 and $13.7 million of asset sales 10. Portfolio and Asset Quality NMFC's mandate is to primarily target businesses in the middle market that, consistent with New Mountain's private equity platform, are high quality, defensive growth companies in industries that are well-researched by New Mountain. The Company's focus is on defensive growth businesses that generally exhibit the following characteristics: (i) acyclicality, (ii) sustainable secular growth drivers, (iii) niche market dominance and high barriers to competitive entry, (iv) recurring revenue and strong free cash flow, (v) flexible cost structures and (vi) seasoned management teams. Portfolio Industry Composition based on Fair Value 8 The Company monitors the performance and financial trends of its portfolio companies on at least a quarterly basis. The Company attempts to identify any developments within the portfolio company, the industry, or the macroeconomic environment that may alter any material element of the Company's original investment strategy. As described more fully in the Company's Quarterly Report on Form 10-Q filed with the U.S. Securities and Exchange Commission, the portfolio monitoring procedures are designed to provide a simple, yet comprehensive analysis of the Company's portfolio companies based on their operating performance and underlying business characteristics, which in turn forms the basis of its Risk Rating. The Risk Rating is expressed in categories of Green, Yellow, Orange and Red with Green reflecting an investment that is in-line with or above expectations and Red reflecting an investment performing materially below expectations. The following table shows the Risk Rating of the Company's portfolio companies as of June 30, 2025: As of June 30, 2025, nearly all investments in the Company's portfolio had a Green Risk Rating, with the exception of six portfolio companies that had a Yellow Risk Rating, seven portfolio companies that had an Orange Risk Rating and one portfolio company that had a Red Risk Rating. The following table shows the Company's investment portfolio composition as of June 30, 2025: Liquidity and Capital Resources As of June 30, 2025, the Company had cash and cash equivalents of $57.4 million and total statutory debt outstanding of $1,526.2 million 3. The Company's statutory debt to equity was 1.17x (or 1.13x net of available cash) as of June 30, 2025. Additionally, the Company had $262.5 million of SBA-guaranteed debentures outstanding as of June 30, 2025. As of June 30, 2025, the Company had $1,079.7 million of available capacity on its Holdings Credit Facility, NMFC Credit Facility and Unsecured Management Company Revolver. Second Quarter 2025 Conference Call New Mountain Finance Corporation will host an earnings conference call and webcast at 10:00 am Eastern Time on Tuesday, August 5, 2025. To participate in the live earning conference call, please use the following dial-in numbers or visit the audio webcast link. To avoid any delays, please join at least fifteen minutes prior to the start of the call. United States: +1 (877) 443-9109 International: +1 (412) 317-1082 Live Audio Webcast A replay of the conference call can be accessed one hour after the end of the conference call through November 5, 2025. The full webcast replay will be available through August 5, 2026. To access the earnings webcast replay please visit the New Mountain Investor Relations website. United States: +1 (877) 344-7529 International: +1 (412) 317-0088 Access Code: 6995709 For additional details related to the quarter ended June 30, 2025, please refer to the New Mountain Finance Corporation Quarterly Report on Form 10-Q filed with the SEC and the supplemental investor presentation which can be found on the Company's website at _________________________ (1) Excludes non-controlling interest in New Mountain Net Lease Corporation ('NMNLC'). (2) Originations exclude payment-in-kind ('PIK'); originations, repayments, and sales exclude revolvers, unfunded commitments, bridges, return of capital, and realized gains / losses. (3) Excludes the Company's United States Small Business Administration ('SBA') guaranteed debentures. (4) Dividend yield calculation uses the closing stock price of $10.42 on August 1, 2025 and $12.42 on July 29, 2024 and includes regular dividends for Q2 2025 and regular and supplemental dividends for Q2 2024. (5) Includes collateral for securities purchased under collateralized agreements to resell. (6) References to 'YTM at Cost' assume the accruing investments, including secured collateralized agreements, in the Company's portfolio as of a certain date, the ''Portfolio Date'', are purchased at cost on that date and held until their respective maturities with no prepayments or losses and are exited at par at maturity. This calculation excludes the impact of existing leverage. YTM at Cost uses the Sterling Overnight Interbank Average Rate ("SONIA'), Euro Interbank Offered Rate ("EURIBOR") and Secured Overnight Financing Rate ('SOFR') curves at each quarter's respective end date. The actual yield to maturity may be higher or lower due to the future selection of SONIA, EURIBOR and SOFR contracts by the individual companies in the Company's portfolio or other factors. (7) Includes investments held in NMNLC. (8) Excludes NMFC Senior Loan Program III LLC ("SLP III"), NMFC Senior Loan Program IV LLC ("SLP IV") and NMNLC. (9) Includes investments classified as structured finance obligations. (10) Office Ally sale closed in May 2025; NMFC's investment was fully repaid upon closing Expand New Mountain Finance Corporation Consolidated Statements of Assets and Liabilities (in thousands, except shares and per share data) (unaudited) December 31, 2024 Assets Investments at fair value Non-controlled/non-affiliated investments (cost of $2,268,989 and $2,298,083, respectively) $ 2,227,265 $ 2,277,352 Non-controlled/affiliated investments (cost of $128,280 and $124,254, respectively) 102,983 112,776 Controlled investments (cost of $700,121 and $679,587, respectively) 670,448 700,896 Total investments at fair value (cost of $3,097,390 and $3,101,924, respectively) 3,000,696 3,091,024 Securities purchased under collateralized agreements to resell (cost of $30,000 and $30,000, respectively) 13,500 13,500 Cash and cash equivalents 57,390 80,320 Interest and dividend receivable 43,156 42,379 Derivative asset at fair value 5,718 — Receivable from unsettled securities sold 4,386 — Receivable from affiliates 413 213 Other assets 34,453 19,265 Total assets $ 3,159,712 $ 3,246,701 Liabilities Borrowings Unsecured Notes $ 989,987 $ 978,503 SBA-guaranteed debentures 262,500 300,000 2022 Convertible Notes 258,811 260,091 Holdings Credit Facility 246,063 294,363 NMFC Credit Facility 31,372 27,944 Deferred financing costs (net of accumulated amortization of $45,690 and $63,971, respectively) (21,103 ) (24,191 ) Net borrowings 1,767,630 1,836,710 Payable for unsettled securities purchased 29,562 — Interest payable 15,561 17,109 Payable to broker 13,900 3,230 Management fee payable 9,759 10,467 Incentive fee payable 5,384 8,625 Deferred tax liability 1,453 1,410 Derivative liability at fair value 1,424 7,423 Other liabilities 3,203 2,436 Total liabilities 1,847,876 1,887,410 Commitments and contingencies Net assets Preferred stock, par value $0.01 per share, 2,000,000 shares authorized, none issued — — Common stock, par value $0.01 per share, 200,000,000 shares authorized, 107,851,929 and 107,851,415 shares issued, respectively, and 106,926,713 and 107,851,415 shares outstanding, respectively 1,079 1,079 Paid in capital in excess of par 1,365,838 1,365,852 Treasury stock at cost, 925,216 and 0 shares held, respectively (9,642 ) — Accumulated undistributed earnings (51,416 ) (13,592 ) Total net assets of New Mountain Finance Corporation $ 1,305,859 $ 1,353,339 Non-controlling interest in New Mountain Net Lease Corporation 5,977 5,952 Total net assets $ 1,311,836 $ 1,359,291 Total liabilities and net assets $ 3,159,712 $ 3,246,701 Number of shares outstanding 106,926,713 107,851,415 Net asset value per share of New Mountain Finance Corporation $ 12.21 $ 12.55 Expand New Mountain Finance Corporation Consolidated Statements of Operations (in thousands, except shares and per share data) (unaudited) Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Investment income From non-controlled/non-affiliated investments: Interest income (excluding Payment-in-kind ("PIK") interest income) $ 53,584 $ 57,583 $ 105,697 $ 113,820 PIK interest income 2,931 4,437 5,844 9,120 Dividend income 506 2,284 1,063 2,577 Non-cash dividend income 3,972 4,797 8,406 9,481 Other income 892 3,291 2,204 4,891 From non-controlled/affiliated investments: Interest income (excluding PIK interest income) 336 376 667 744 PIK interest income 1,057 873 2,044 1,709 Non-cash dividend income 292 1,374 1,975 2,618 Other income 62 62 125 125 From controlled investments: Interest income (excluding PIK interest income) 2,022 1,383 3,507 2,744 PIK interest income 2,900 3,721 6,588 7,856 Dividend income 12,183 12,340 24,381 25,023 Non-cash dividend income 2,378 1,570 4,449 3,066 Other income 375 497 2,203 1,370 Total investment income 83,490 94,588 169,153 185,144 Expenses Interest and other financing expenses 31,138 33,113 62,512 64,129 Management fee 9,759 11,351 19,992 22,348 Incentive fee 7,971 9,550 16,218 18,939 Professional fees 1,100 1,127 2,489 2,194 Administrative expenses 1,184 1,108 2,288 2,076 Other general and administrative expenses 331 527 847 992 Total expenses 51,483 56,776 104,346 110,678 Less: management and incentive fees waived (2,586 ) (861 ) (4,408 ) (1,762 ) Net expenses 48,897 55,915 99,938 108,916 Net investment income before income taxes 34,593 38,673 69,215 76,228 Income tax expense (benefit) 8 234 (11 ) 235 Net investment income 34,585 38,439 69,226 75,993 Net realized (losses) gains: Non-controlled/non-affiliated investments 13,390 (34,966 ) 12,316 (46,824 ) Controlled investments (1 ) 3,800 38,898 3,831 Net change in unrealized appreciation (depreciation): Non-controlled/non-affiliated investments (29,012 ) 32,895 (24,806 ) 56,055 Non-controlled/affiliated investments (8,928 ) (4,080 ) (13,819 ) (26,543 ) Controlled investments (2,590 ) 1,697 (50,982 ) 4,017 Securities purchased under collateralized agreements to resell — (3,000 ) — (3,000 ) Foreign currency 452 129 602 106 Provision for taxes (21 ) (130 ) (43 ) (767 ) Net realized and unrealized losses (26,710 ) (3,655 ) (37,834 ) (13,125 ) Net increase in net assets resulting from operations 7,875 34,784 31,392 62,868 Less: Net increase in net assets resulting from operations related to non-controlling interest in New Mountain Net Lease Corporation (101 ) (313 ) (205 ) (989 ) Net increase in net assets resulting from operations related to New Mountain Finance Corporation $ 7,774 $ 34,471 $ 31,187 $ 61,879 Basic earnings per share $ 0.07 $ 0.32 $ 0.29 $ 0.59 Weighted average shares of common stock outstanding - basic 107,750,160 106,891,784 107,800,508 105,276,077 Diluted earnings per share $ 0.07 $ 0.31 $ 0.29 $ 0.56 Weighted average shares of common stock outstanding - diluted 126,733,459 125,759,769 126,792,855 124,101,624 Distributions declared and paid per share $ 0.32 $ 0.34 $ 0.64 $ 0.70 Expand ABOUT NEW MOUNTAIN FINANCE CORPORATION New Mountain Finance Corporation (NASDAQ: NMFC) is focused on providing direct lending solutions to U.S. upper middle market companies backed by top private equity sponsors. Our investment objective is to generate current income and capital appreciation through the sourcing and origination of senior secured loans and select junior capital positions, to growing businesses in defensive industries that offer attractive risk-adjusted returns. Our differentiated investment approach leverages the deep sector knowledge and operating resources of New Mountain Capital, a global investment firm with over $55 billion of assets under management. ABOUT NEW MOUNTAIN CAPITAL New Mountain Capital ("NMC") is a New York-based investment firm that emphasizes business building and growth, rather than debt, as it pursues long-term capital appreciation. The firm currently manages private equity, credit and net lease investment strategies with over $55 billion in assets under management. New Mountain seeks out what it believes to be the highest quality growth leaders in carefully selected industry sectors and then works intensively with management to build the value of these companies. For more information on New Mountain Capital, please visit Statements included herein may contain 'forward-looking statements', which relate to our future operations, future performance or our financial condition. Forward-looking statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties, including changes in base interest rates and significant volatility on our business, portfolio companies, our industry and the global economy. Actual results and outcomes may differ materially from those anticipated in the forward-looking statements as a result of a variety of factors, including those described from time to time in our filings with the Securities and Exchange Commission or factors that are beyond our control. New Mountain Finance Corporation undertakes no obligation to publicly update or revise any forward-looking statements made herein, except as may be required by law. All forward-looking statements speak only as of the time of this press release.
Yahoo
22-07-2025
- Business
- Yahoo
FedEx Freight gives shippers ‘more time' to adjust to new LTL class rules
The nation's largest less-than-truckload carrier, FedEx Freight, is delaying enforcement of a new set of freight classification rules until Dec. 1. The National Motor Freight Traffic Association (NMFTA), a nonprofit trade group, rolled out final updates to its decades-old freight classification ratings on Saturday. The revisions are moving the industry toward a density-based coding system that is expected to more accurately align actual carrier costs with pricing. For months, the NMFTA, carriers and 3PLs have been working to help shippers prepare for the changes to the 90-year-old National Motor Freight Classification (NMFC) system. The advice to shippers has been: 'know your freight.' Shippers are now tasked with better understanding the full dimensions of their shipments, not just the weights. The more information provided upfront, the more accurate shipment pricing is likely to be, experts say. However, FedEx Freight (NYSE: FDX) said it is giving its customers 'more time to adjust.' 'Since several commodities are moving to density-based classification, it's more important than ever for shippers to accurately record shipments' density, weight, and dimensions. If you ship these types of commodities, the density will determine the classification,' a statement on the company's website said. The carrier also cautioned that future charges may apply for incomplete details on a bill of lading. 'Once the changes are fully adopted, FedEx Freight may apply an inspection surcharge (Item 980, Item 981) for shipments with incomplete or inaccurate information listed on the BOL.' FreightWaves has reached out to FedEx for comment. More FreightWaves articles by Todd Maiden: New LTL freight class rules take effect on Saturday ArcBest CEO Judy McReynolds to retire J.B. Hunt still waiting for market to turn The post FedEx Freight gives shippers 'more time' to adjust to new LTL class rules appeared first on FreightWaves. Sign in to access your portfolio
Yahoo
15-07-2025
- Business
- Yahoo
LTL pricing index to hit record high in Q3
A sagging industrial economy and global trade uncertainty continue to constrain less-than-truckload demand, but carriers are still pushing through rate increases. The LTL rate-per-pound component of the TD Cowen/AFS Freight Index is expected to reach a record high during the third quarter, a quarterly report showed on Tuesday. Third-party logistics company AFS Logistics and financial services firm TD Cowen are forecasting their LTL rate index to climb to a level that is 65.9% higher than a January 2018 baseline. That would be 170 basis points above the second quarter reading and 130 bps above the prior peak set during the freight boom that concluded in 2022. If the forecast holds, the index would be up on a year-over-year comparison for a seventh straight quarter. 'The continued resilience of the rate-per-pound index shows the effect of carrier pricing discipline, and the upcoming NMFC [National Motor Freight Classification] transition to a density framework should equip carriers with another method to tightly manage freight classification and pricing,' said Aaron LaGanke, vice president of freight services at AFS, in the report. (Changes to the National Motor Freight Traffic Association's classification system will take effect on Saturday.) Cost per LTL shipment fell 2.9% y/y in the second quarter but weight per shipment was off 5.1% y/y, 'indicating that carriers are holding firm on pricing and emphasizing revenue management strategies,' the report said. Sequentially, cost per shipment was down 1.6% but weight per shipment (down 1.8% from the first quarter) and fuel surcharges (down 1.3%) were headwinds, which were offset by a 3.6% increase in length of haul. The report is in line with second-quarter updates in early June that showed LTL carriers continued to realize y/y yield increases in April and May. Truckload data from the index, however, continued to show depressed trends. The TL rate-per-mile component of the TD Cowen/AFS index is expected to decline 40 bps sequentially in the third quarter to just 5.6% above the 2018 baseline. That would mark 10 straight quarters of trough-like conditions for the pricing dataset after peaking at 25.7% in the first quarter of 2022. Truckload linehaul cost per shipment was up 1.7% sequentially in the second quarter, but the increase was driven by a 1.8% uptick in miles per shipment. 'Ongoing trade and tariff uncertainty is hampering the truckload market's recovery from the freight recession that started three years ago,' the report concluded. The LTL earnings season kicks off on July 25 when Saia (NASDAQ: SAIA) reports second-quarter results before the market opens. AFS Logistics is a non-asset-based 3PL providing audit and cost management services, managed transportation, and freight brokerage. It has visibility into more than $39 billion in annual freight spend. More FreightWaves articles by Todd Maiden: June produces mixed freight trends, recovery remains 'elusive' Carrier Logistics automates LTL shipment data entry ArcBest touts results from EV semi pilot The post LTL pricing index to hit record high in Q3 appeared first on FreightWaves.
Globe and Mail
07-07-2025
- Business
- Globe and Mail
New Mountain Finance Corporation Schedules its Second Quarter 2025 Earnings Release and Conference Call
New Mountain Finance Corporation (NASDAQ: NMFC) ('New Mountain' or 'the Company') announced today that it will release its financial results for the quarter ended June 30, 2025, on Monday, August 4, 2025, after markets close. The Company will host an earnings conference call and webcast at 10:00 am Eastern Time on Tuesday, August 5, 2025. During the live conference call, the Company's officers will review the second quarter performance, discuss recent events and conduct a question-and-answer session. Second Quarter 2025 Conference Call Information To participate in the live earnings conference call, please use the following dial-in numbers or visit the audio webcast link. To avoid any delays, please join at least fifteen minutes prior to the start of the call. United States: +1 (877) 443-9109 International: +1 (412) 317-1082 Live Audio Webcast Second Quarter 2025 Conference Call Replay Information A replay of the conference call can be accessed one hour after the end of the conference call through November 5, 2025. The full webcast replay will be available through August 5, 2026. To access the earnings webcast replay, please visit the New Mountain Investor Relations website. United States: +1 (877) 344-7529 International: +1 (412) 317-0088 Access Code: 6995709 ABOUT NEW MOUNTAIN FINANCE CORPORATION New Mountain Finance Corporation (NASDAQ: NMFC) is focused on providing direct lending solutions to U.S. upper middle market companies backed by top private equity sponsors. Our investment objective is to generate current income and capital appreciation through the sourcing and origination of senior secured loans and select junior capital positions to growing businesses in defensive industries that offer attractive risk-adjusted returns. Our differentiated investment approach leverages the deep sector knowledge and operating resources of New Mountain Capital, a global investment firm with over $55 billion of assets under management. FORWARD-LOOKING STATEMENTS Statements included herein may contain 'forward-looking statements', which relate to our future operations, future performance or our financial condition. Forward-looking statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties, including changes in base interest rates and significant volatility on our business, portfolio companies, our industry and the global economy. Actual results and outcomes may differ materially from those anticipated in the forward-looking statements as a result of a variety of factors, including those described from time to time in our filings with the Securities and Exchange Commission or factors that are beyond our control. New Mountain Finance Corporation undertakes no obligation to publicly update or revise any forward-looking statements made herein, except as may be required by law. All forward-looking statements speak only as of the time of this press release.
Daily Maverick
27-06-2025
- Health
- Daily Maverick
Frustrated Free State doctors face unemployment after Cuban medical training in systemic crisis
A cohort of young doctors whose training was funded by the Free State government through the Nelson Mandela-Fidel Castro Bursary programme have been unable to find work in the public health sector upon completing their community service, despite a contractual obligation to serve the province that supported their studies. More than 20 young doctors from the Free State who received training in Cuba through the Nelson Mandela-Fidel Castro (NMFC) Bursary programme, funded by the provincial health department, have been unable to find work in the public health sector due to a lack of posts. Across South Africa, provincial health departments provide funding for individuals from their respective regions to study medicine through the NMFC Bursary programme. Upon returning from Cuba and completing their internship, beneficiaries are required to serve their local government in the health sector for the number of years for which they were funded. However, about 24 Free State NMFC Bursary holders who completed their community service requirement over the past year have not been able to fulfil their contractual obligation to continue working in the province's public sector, according to *Thabo, a beneficiary of the programme who chose to remain anonymous out of concern for backlash. 'We've been to the [health] MEC's office. We've been to the premier's office. We've spoken with the [head of the Free State health department], and no one seems to be taking accountability. It's just one person bouncing you to the next person… and there's no real sense of urgency about what's happening on the ground in the hospitals, with the [staff] shortages, the patients or even us, as their investments,' he said. Waiving obligations The cohort of NMFC Bursary beneficiaries sent a memorandum of demands to the Free State premier and MEC for health in January, pushing for immediate appointments in local health facilities. In a letter responding to this memorandum, seen by Daily Maverick, head of the Free State health department Masechaba Sesing stated: 'It is true that the bursary policy places a contractual obligation on both parties to either offer employment to bursary holders upon completion of their studies, provided that there are vacant funded posts in the department, and on the bursary holder to work back the bursary for the period of the bursary granted, should the department offer a post within three months from date of completion of the studies. 'Should the department not be in a position to offer employment within three months from date of completion, the bursary holder is released from the bursary obligation.' Thabo claimed that the three-month limit on the state's obligation to employ post-community service bursary holders was a new development, not featured in beneficiaries' original contracts. In a second letter from the NMFC Bursary cohort, addressed to Sesing and dated 7 March 2025, the graduates entreated the provincial health department to find a strategy to retain them in the public sector. 'For [the] Free State, each graduate costing approximately R1,137,500 to R1,750,000 is a tailored asset to address our province's dire healthcare gaps. Yet, without a robust retention strategy, we risk losing these doctors to urban centres or other provinces, undermining… the province's investment, the ANC mandate and the vision of Mandela and Castro,' stated the letter. Thabo claimed that the Free State health department had not advertised any positions for young, post-community service doctors since January. Driving away assets It's not only NMFC Bursary holders who are struggling to get public sector posts, but also those from other state-funded bursary programmes that support medical training in Russia, China and South Africa, according to Thabo. 'We're adults now — some of us have families, some of us are married, some of us have kids. Even if you have savings and you're projecting that for at least three months you'll be okay… then three months pass by and there's still nothing,' he said. 'With the number of unemployed post-community service medical officers, you can only imagine how many of us are looking for work.' The situation had taken its toll on the mental wellbeing of graduates, said Thabo, with many experiencing depression and anxiety. 'You become hopeful and it gets crushed. You reach out for help and you're treated like… a nobody, like you don't have any value… And you know the skillset you possess, you know the impact you make,' he said. 'You hear from your colleagues [in the public sector]… how overwhelmed they are, and you have the ability to help, but you can't because you're not in the system.' Since completing his community service last year, Thabo has found work outside the Free State in the private sector. However, he noted that the large number of young doctors flocking to private facilities increased the likelihood of exploitation. 'The issue with private, now, is… they know we're unemployed, we're desperate. Instead of giving us the rate per hour that they normally give, they reduce it because they know we'll take whatever we can get. So, it's tough financially,' he said. 'I'd love to come back home [to the Free State]. There's so much potential. We're running behind on so many things — the infrastructure, the development. I'd like to be there and be able to contribute to the primary healthcare system in general… But if I'm not allowed the opportunity, then obviously self-preservation is going to come into play.' Free State Department of Health Mondli Mvambi, the spokesperson for the Free State Department of Health, acknowledged that there were graduates of the NMFC Bursary programme that the department hadn't been able to employ. 'The necessary human resources processes must be followed in appointing the students. Posts must be advertised and each person [has] to apply. The department does not get enough funding from the Division of Revenue to meet all its human resources and other pressing service delivery needs,' said Mvambi. 'The department has commenced the process to identify savings within the Compensation of Employees' budget to identify posts that can be filled within the [Medium-Term Expenditure Framework] period.' If the Free State Department of Health is unable to employ bursary beneficiaries within three months of them completing their studies, the young doctors are permitted to 'ply their trade' in other provinces, the private sector, the national Department of Health or overseas, according to Mvambi. 'This [NMFC Bursary] programme contributes immensely to the human resources development strategy of the country… The role of the state is… to create an enabling environment, and training is one such enabling environment. The creation of employment opportunities is beneficial to the development needs of all our provincial citizens, South Africans, Africans and the international community,' he said. Broader challenges The Free State is not the only province struggling to provide posts for state-funded bursary holders who have completed their community service requirement. Dr Percy Mahlathi, deputy director-general for hospital services and human resources in the national Department of Health, told Daily Maverick that the department was 'fully aware' of the issue. 'It is not limited to students who were studying overseas or in Cuba. Even those who are studying in our own medical schools, funded by the various provinces, are facing the same challenge,' he said. Health officials, including the current and previous ministers of health, have engaged with the National Treasury about prioritising doctors who have just completed their community service, according to Mahlathi. However, he noted that employing these young professionals after internship and community service was not a statutory obligation. 'The moral obligation is there, but a contractual obligation is no longer there. I'm saying moral obligation because when you've got such a huge… patient load in the public health system, you would like to have… as many health professionals as possible. But the problem we then have is: When you don't have enough financial resources, what do you do?' said Mahlathi. Processes around the budget that was tabled on 21 May have yet to be finalised in Parliament. Once complete, Mahlathi said he hoped there would be a funding allocation that would allow the health departments to employ 'most, if not all' the doctors who had recently completed their community service. 'I do know that once the provinces get funding allocations, they are going to prioritise those who they have funded to study… I know when you are a doctor out there, funded or not, you want a job, but if we look from the public value point of view, there's been an investment in those who are given bursaries, and therefore they should be prioritised,' he said. At this stage, Mahlathi was unable to confirm when budget allocations would allow for the employment of post-community service doctors, or how many young professionals would receive opportunities. He estimated there were close to 1,300 such doctors awaiting employment. 'With all these ups and downs with the budget… it actually became a serious problem for the provinces. Very few people were able to be employed,' he said. The national Department of Health had asked provincial health departments to work on 'various scenarios' pending the finalisation of funding allocations in the budget, according to Mahlathi. 'They must work out the scenarios so that they don't wait until the allocation lands to start doing the technical work. That's what they are busy with now,' he said. Mahlathi said he was against any changes to the country's bursary programmes for medicine, such as a reduction in the number of beneficiaries. 'There are young, brilliant minds of all races that would not be able to study if they did not have that bursary… I don't think it would be a good idea for governments to say, 'Look, we don't have money now, we're going to stop educating South Africans', because we will feel a terrible impact in about eight to 10 years, when we've actually got less [graduates],' he said. Dr Aslam Dasoo, the convenor of the Progressive Health Forum, said unemployed graduates of the NMFC Bursary programme were 'organising themselves', and that the forum had reached out to them. 'The bursary is underwritten by the state and the forum will support their stance on the bursary being written off, provided [the graduates] take up positions in the public service for a specified period when posts become available,' said Dasoo. 'It's really the inchoate health department and its political heads who are the obstacle here.' DM
