Ramsay Health Care Limited (ASX: RHC) released its 2018 financial results to the market today revealing a 5.4% rise in revenue.

Ramsay Health Care is the largest private hospital business in Australia and one of the largest in the world.

Here are some of the highlights from its result:

  • Revenue up 5.4% to $9.2 billion
  • EBITDA grew by 6.2% to $1.4 billion (click here to learn what EBITDA means)
  • ‘Core’ net profit up 6.8% to $579.3 million
  • Reported net profit down 20.6% to $388.3 million
  • Full year dividend per share increased by 7.1% to $1.44

According to Bloomberg, analysts were expecting Ramsay Health Care to report a profit of $420.5 million. A dividend of $1.45 was also expected. The reported result appears to be under analyst’s expectations.

Ramsay reports its core operations profit, which doesn’t include significant one-off items such as the $29.9 million restructuring of the French Ramsay, the $122 million impairment of Ramsay UK and $39.1 million of ‘other’.

The French operations reported that revenue grew by 0.3% to €2.2 billion. French EBITDAR fell 0.6% to €445.7 million. In the UK revenue dropped 5.2% to £424.2 million and EBITDAR declined 9.8% to £102.7 million. Australia delivered the healthy result of the group, revenue climbed 5.5% to $4.9 billion and EBITDA rose 12.1% to $896 million.

Ramsay Health Care Managing Director Craig McNally said:

“Despite the headwinds we faced in all our markets, Ramsay Health Care has delivered a good result driven by the quality, diversity and scale of our hospitals, which continue to achieve above market growth, as well as our disciplined cost management focus.”

The Australian operations are facing tougher times with concerns surrounding private health insurance affordability – a patient is a lot more likely to use a private hospital if they have insurance. Premiums have been going up quicker than wage growth for a number of years.

However, by focusing on expenses Ramsay was able to deliver growth this year. Mr McNally commented, “EBIT growth in Australia was positively impacted by our disciplined cost management strategies and our focus on achieving further operational efficiencies as well as some one-off benefits.”

During FY18 Ramsay approved $325 million of new projects, which will add 229 net new beds and 24 theatres. The healthcare company added 18 Malouf pharmacies to its pharmacy network, bringing the number of franchises to 54.


In FY19 Ramsay is predicting that Core EBITDA will grow between 4% to 6% and Core earnings per share (EPS) will grow by up to 2%. The company said that higher interest and tax in FY19 are the key culprits as well as challenging growth conditions in all of its main markets.

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