Ramsay Health Care (ASX:RHC) reinstates dividends, though profit declines 12.5%

The healthcare giant, ASX-200 listed Ramsay Health Care Ltd (ASX:RHC) shared its 1HFY21 result that suggested an operational and financial strength despite pandemic disturbance. It also said that the Company is well placed for surgical backlog and underlying demand for non-surgical services.

Following are the major takeaways from the ASX release:

  • The revenue from patients and other revenue dropped by 6.6% quoted at $5,916.6 million.
  • EBIT dropped 4.2% and stood at $583.8 million.
  • The statutory net profit fell 12.5% to $226 million.
  • The Company had dividend per share dropped by 22.4% at 48.5 cents.
  • Fully diluted earnings per shares (EPS) was quoted at 96.9 cents, down 21.1%.

According to the ASX release, the 1HFY21 result hints at the current impact of the COVID-19 pandemic. This impact includes operational constraints across the regions and reduced requirement for non-surgical services.

The Company said that its strong balance sheet and cash flow supported the continued investment in, and optimism of the Group’s facilities and footprint.

The capital expenditure for the period was $352 million across the regions.

The Board affirmed a fully franked interim dividend of 48.5 cps demonstrating a payout ratio of 50% of statutory profit.

As per the release, the continuation of dividend payments signifies the Board’s trust in the solid balance sheet and cashflows of the Company’s business.

During the given period, the Company established the ‘Ramsay Cares Strategy’.

Craig McNally, CEO and Managing Director said that the 1HFY21 result indicates the turbulence triggered by extended waves of COVID-19 cases limiting surgical activities and other medical services across all the regions. He explained that the results are suggestive of financial as well as operational strength of the business.

In the meantime, the stock RHC closed the session in green at $68.180 per share, up 7.743% with market cap of $14.48 billion.

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