This article is from the Australian Property Journal archive
MULTINATIONAL healthcare and hospital group Ramsay Healthcare (ASX: RHC) saw a major boost in profit over the year, after an uptick in patient activity the execution of productivity improvement programs across all regions.
Ramsay provided a net profit after tax for 2024 of $888.7 million, up significantly from 2023’s $298.1 million.
Statutory net profit after tax and non-controlling interests was up 198.1% compared to the pcp, including the net profit after tax realised on the sale of Ramsay’s Asian joint venture RSD of $618 million, resulting in cash proceeds of $926.9 million.
Total revenue was up 9.4% over the year to $16,772.1 million up from 2023’s $15,329.3 million.
RHC has declared a fully franked final dividend of 40.0 cps taking the full year dividend to 80.0cps up 6.7%.
“I am pleased to report an operating result that reflects the benefits of growing patient activity and productivity improvement programs across all of our regions. We have made some progress with private sector payors on tariff indexation, however tariffs from payors remain out of touch with cost inflation,” said Craig McNally, CEO and managing director at Ramsay.
“The bottom line result also reflects the $618m cash profit on the sale of our Asian joint venture Ramsay Sime Darby (RSD), which has strengthened our balance sheet. As a result the Funding Group leverage ratio is now within our target range at 2x.”
This reflects a payout ratio of 72.0%, up on the previously stated target range of 60-70% of net profit from continuing operations.
“In response to the changing healthcare landscape we are focusing on programs that optimise and drive greater value from our core hospital network, while also investing in the transformation of the business to create digitally enabled, integrated patient centric care pathways,” added McNally.
“While this investment will continue to impact margin recovery for the next few years, it will ultimately deliver sustainable top-line growth and significant productivity improvements. We will ensure we apply rigorous discipline around both our brownfield capex and transformation programs however it is critical that we invest today to leverage our leading industry position and brand to ensure we remain at the forefront of shifting stakeholder demands and expectations.”
Ramsay Australia saw a 2.9% increase in EBIT after a 6.1% boost to revenue, supported by 1 3.1% increase in admissions.
“Patient activity is forecast to grow in FY25, albeit the rate of growth is expected to be slower than in FY24. We expect NPAT from continuing operations to increase. Margin recovery will be impacted by further investment in business enablement, particularly in digital and data programs in Australia, and the ongoing gap between wage inflation and tariff indexation most notably in the UK and Europe,” concluded McNally.
Ramsay forecasts continued growth across all regions in FY24, though at a lower rate than seen this year.
After the completion of the Ramsay Santé refinancing, FY25 net interest expense (is forecast to be in the range of $590 million to $620 million, with a dividend payout ratio is expected to be 60-70%.
