Shares in private hospitals operator Ramsay Health Care dropped as much as 7.3% yesterday after it revealed a surprise drop in its first-quarter earnings.
The company told the ASX that first quarter revenue (unaudited) rose a weak 1.3% to $3.2 billion which saw a huge near-40% slide in unaudited after-tax profit to just $58.1 million.
The shares bottomed out at $66.975 and ended the day with a small recovery to be down 4% at $69.38
Ramsay blamed the slide in earnings and weak revenue growth on the elective surgery restrictions and disruptions caused by isolation orders and lockdowns across Greater Sydney and Western Australia.
As well In Victoria and Queensland also incurred disruptions due to Covid Delta lockdowns which also restricted elective operations.
Ramsay Health said that saw it experience a rise in costs in the quarter.
And it was a similar story in the UK where the company was hit by significant procedure cancellations and higher operating costs as well.
These heightened costs included extra staffing costs associated with COVID-related isolation orders.
Ramsay CEOCraig McNally said in a statement with the results that:
“While the COVID environment has continued to create significant disruption across our business, we are seeing strong underlying demand for health care services across our regions.
“Our team will continue to support the public health sector as we transition the business to an environment where the world learns to live with COVID.”
On top of all this Ramsay is repaying early its $200 million worth of fixed-rate loan facilities. That will cost it $11.3 million in early repayment fees but the company will save more than $13 million in finance costs over the next three years.
