Multinational healthcare provider Ramsay Health Care [ASX:RHC]...

Multinational healthcare provider Ramsay Health Care [ASX:RHC] presented its first-half results for the six month period ending 31 December.

The group reported a 22.3% rise in net profit over the six-month period, with a total of $194.4 million while statutory revenue went up 10.7% to $7.4 billion year-on-year.

RHC’s share price is $65.91 at time of writing, sitting flat after the latest results were released.

The healthcare stock was up very slightly in the year by 2% and 5% down in its sector, tracking noticeably below the likes of Cochlear [ASX:COH] and CSL [ASX:CSL]:

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Ramsay Health Care sees improvements in surgical environment

The healthcare giant announced its half-year results yet failed to excite investors with a run of improved changes and uptick in metrics year-on-year.

Ramsay reported that its total revenue went up 13.6%, from $6.47 billion in the half year 2021 to $7.1 billion in the period just ended.

Earnings before other costs, tax, depreciation, amortisation, and rent (EBITDAR) improved 10.8%, from $1 billion to $1.09 billion.

Net profit after tax went up 10.8%, from $208 million to $236 million, and statutory net profit (after interest) came to $194.4 million, which was up 22.3% on the previous period.

All in all, the latest results contributed to a board decision to raise the ordinary interim dividend to 50 cents per share from 48.5 cents, fully franked, which was up 3% on the prior year.

Ramsay noted improvements in the second quarter in comparison with the first half, thanks to COVID-19’s impacts and disruptions dying down. The company also found that an increase in underlying surgical activity levels in all regions boosted its results for the half.

However, RHC flagged non-surgical activity in select regions is still taking a much slower recovery.

Craig McNally, RHC’s CEO, commented:

‘We expect the underlying earnings momentum in the business will continue in 2HFY23, albeit the path out of the COVID environment is not expected to be smooth. We expect non-surgical admissions to improve as the environment starts to normalise.

‘We are confident the outlook for the Group remains strong. The business remains well placed to take advantage of the long-term dynamics impacting the healthcare sector, leveraging the benefits of global collaboration and insight to establish communities of best practice to adapt to local markets. We continue to expect a gradual recovery in earnings through FY23 and a more normalised environment in FY24.’

As the operating environment normalises, Ramsay expects its dividend payout ratio to be in the range of 60–70% of statutory net profit.

Ramsay expects a gradual recovery through FY23 and more normalised conditions from FY24 onwards, having invested round $3 billion since 2020 for facility and service expansion and in newfound government partnerships.

The group is also looking into negotiations with payors in regard to COVID costs and the inflationary environment, hoping to leverage itself within the confines of the current operating environment.

Regards,

Mahlia Stewart,

For Money Morning

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