Healthscope Ltd (ASX: HSO) released its 2018 financial results to the market today revealing a 50% decrease in net profit.
Healthscope is the second biggest private hospital operator in Australia.
Here are some of highlights from the report:
- Revenue increased by 3.7% to $2.34 billion
- Operating EBITDA decreased by 4.4% (click here to learn what EBITDA means)
- Operating profit fell by 10.3% to $151.2 million
- Reported profit dropped 49.9% to $75.8 million
- Dividend decreased by 4.3% to 6.7 cents per share
According to Bloomberg, analysts were expecting Healthscope to report a profit of $164.7 million. A dividend of 6.2 cents per share was also expected. With the result below estimates investors appear to have been disappointed by the company’s performance.
The statutory result was hurt by $75.4 million due to asset write downs, redundancy & closure costs relating to the Geelong Private Hospital & Cotham Private Hospital and bid assessment costs.
In FY19 Healthscope is targeting hospital operating EBITDA growth of 10%.
Selling property hospital stake
Healthscope also announced that it will separate its hospital property assets into an unlisted property trust, bringing in a new investor to own 49% of the trust. These assets have a book value of around $1 billion.
Chairman Paula Dwyer said: “Healthscope’s control and management rights over our hospitals, as well as our operating flexibility to continue to deliver on their growth potential.”
The money will be used to release capital to shareholders and strengthen Healthscope’s financial position. It is expected to be completed sometime during in FY19.
Introducing The Australian Investors Podcast
Join The Rask Group’s founder, Owen Raszkiewicz, as he profiles Australia’s best investors, founders, authors and financial thinkers. Download it free on iTunes, Castbox
, SoundCloud or wherever you choose to listen.
