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Highlights:
- Ramsay Health Care Limited (ASX:RHC) released its 1HFY23 results ended 31 December on Thursday.
- In 1HFY23, the company’s net profit grew 22.3% YoY to AU$194.4 million.
- Ramsay has reactivated its Dividend Reinvestment Plan, which will be applicable for the dividend declared in 1HFY23 too.
Ramsay Health Care Limited (ASX:RHC) released its 1HFY23 results ended 31 December 2022 on Thursday, 23 February 2023. The hospital network operator reported 22.3% growth in its net profit and reported a 50 cents per share dividend (up 3.1% over pcp), sending its shares higher. RHC shares ended today’s trade 3.03% higher at AU$67.910, outperforming the broader ASX200 index that settled with 0.37% loss.
Let’s scan through Ramsay’s half-yearly results in detail.
During the 1HFY23 period, total revenue and other income (less interest income) increased 10.4% to AU$7,380.8 million versus AU$6,687.4 million in 1HFY22. It was propelled by elevated surgical activity throughout all the regions, lesser restrictions pertaining to surgeries and improvement in handling the COVID disruptions.
EBITDA rose 7.8% on pcp to AU$1,026.5 million from AU$952.6 million. EBIT grew 12.3% to AU$549.6 million from AU$489.2 million. Net profit after tax attributable to owners of the parent in the reported period was up 22.3% to AU$194.4 million from AU$158.9 million in pcp. Total basic earnings per share (after CARES dividend) increased 22.5% to 82.9 cents from 67.8 cents in pcp.
Ramsay’s regional performances
Ramsay Australia noted revenue from patients at AU$2,731 million, increasing from AU$406 million in pcp. EBITDAR was at AU$2,841 million, improving from AU$419 million in pcp. The group's JV in Asia, Ramsay Sime Darby, saw a 12% rise in revenue from patients to MYR585 million from MYR135 million in pcp. EBITDA rose to MYR656 million from MYR160 million in pcp.
Ramsay UK’s revenue from patients skyrocketed to AU$513 million from AU$10 million in pcp. EBITDAR improved to AU$910 million from AU$88 million in pcp. Ramsay Sante in Europe’s revenue from patients was at AU$3,353 million, rising from AU$3,225 million in pcp. EBITDAR was at AU$573 million down from AU$585 million in pcp.
Ramsay’s 1HFY23 dividend
For 1HFY23, Ramsay announced a 100% franked dividend of 50 cps, up 3.1% from 48.5 cps in pcp. The interim dividend represents a payout ratio of just over 60% since the company is aiming towards a payout range between 60-70% of statutory net profit. This dividend is payable by the company on 30 March 2023 and has a record date of 7 March.
On Thursday, the company further updated on the Dividend Reinvestment Plan’s reactivation. It will allow stakeholders to make a reinvestment of dividend payments into a further 100% paid company’s securities in a cost-effective and smooth manner.
Dividend Reinvestment Plan will operate for dividends declared in 1HFY23. The securities issued as per Dividend Reinvestment Plan will be issued at a discount of 1.5% to the average daily weighted price for the ten days trading period beginning 9 March 2023.
Ramsay FY23 outlook
The company is fast-tracking digital and data strategy investment targeting to deliver further integrated patient experience, better clinical results and enhanced productivity.
For the rest of FY23, an increase in underlying earnings is expected to happen from the additional capacity created over the last few years, together with contributions for a full year from Elysium and other recent acquisitions made in Europe. However, the healthcare service provider also highlighted that capacity utilisation would depend on how the company tackles workforce shortage.
