Healthscope Tables The Interim Results For H1 FY19

On 14 February 2019, Healthscope Limited declared a 6.7% decline in Statutory NPAT from continuing operations to $66.9 million for the six months ended 31 December 2018.

Australia’s leading healthcare company, Healthscope Limited (ASX:HSO) delivered Earnings Per Share (EPS) of 3.8 cps from continuing operations in 1H FY19, down 7.3%, despite achieving the revenue growth of 3% to $1,224.6 million compared to the previous corresponding period.

However, after taking discontinued operation into account, Healthscope declared 1H FY19 Statutory NPAT of $236.6 million representing a massive growth of 199% on 1H FY18 driven by the gain on sale of Asian Pathology of $166.9 million.Â

During the period, the company continued with its turnaround strategy including brownfield investments, portfolio restructuring as well as the closures of loss-making operations. The company opened its landmark Northern Beaches Hospital (NBH) in October 2018 on time and budget. And it also extended its contracts with District Health Boards for its New Zealand Pathology business.

Managing Director and Chief Executive Officer of Healthscope, Gordon Ballantyne, said: “In FY19 Healthscope has returned to earnings growth on the back of decisive actions taken in FY18 to turn around operating performance, reset the business portfolio and align the entire Healthscope team to consistently deliver market-leading clinical outcomes and patient care.”

Healthscope operates three segments that include Hospitals business, New Zealand Pathology business and Corporate division. On the segmental performance front, the company’s Hospitals division delivered revenue of $1,101.8 million, up 3.0%, despite the ongoing private hospital market pressures and variability in patient case mix. Hospitals’ Operating EBITDA was $185.7 million, up 8.8% and in line with FY19 guidance. Whereas, the New Zealand Pathology delivered revenue of $122.8 million, up 2.9% and Operating EBITDA of $29.0 million, up 0.7%.

Mr Ballantyne added that the company had launched a number of company-wide initiatives to support its team of over 16,650 staff to get “Back to Bedside”, embedding patient-centred care systems and practices that help staff focus their time to deliver exceptional patient care. Pleasingly in FY19 year to date, 84% of patients gave the company the highest possible rating in overall quality of treatment and care.

The management believes that the launch of their flagship Northern Beaches Hospital demonstrates significant progress of the company as just in first 100 days of Northern Beaches, the company admitted more than 10,300 patients, treated more than 15,600 people in the emergency department, performed more than 3,700 surgical procedures.

Moreover, the company commits to continue investing in growth with six hospital development projects completing during the period and a further five under construction. The hospital expansion program has reportedly continued to be funded through a combination of cash reserves, operating cash flow and available debt facilities.

Its Operating cash flow was $218.4 million in 1H FY19 representing a strong Operating EBITDA to Operating cash flow conversion ratio of 110.2%. As at 31 December 2018, the Group’s total gearing ratio was reduced to 3.02 times Net Debt to Group Operating EBITDA.

Healthscope has announced an interim dividend of 3.5 cents per share, fully franked, scheduled to be paid on 26 March 2019 with a record date of 5 March 2019.

With the close of the trading session on 14 February 2019, HSO settled flat at A$2.480 with A$ 4.32 billion market capitalization and 1.74 billion outstanding shares.

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