Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Sonic Healthcare (ASX:SHL) share price declines 5% on FY23 result, lower COVID testing

The Sonic Healthcare Ltd (ASX: SHL) share price is down 5% after the business announced its FY23 result.

Sonic Healthcare is a global pathology provider, with operations in Europe, US and Australia.

FY23 result

Here are some of the highlights from the report for the 12 months to June 2023:

  • Base business revenue rose 11% to $7.68 billion
  • COVID-19 revenue sank 80% to $485 million
  • Total revenue dropped 13% to $8.17 billion
  • EBITDA (EBITDA explained) declined 40% to $1.71 billion
  • Net profit after tax (NPAT) fell 53% to $685 million
  • Full year dividend grew by 4% to $1.04 per share

Looking at the individual areas, there was base business organic growth: in the US of 4%, in Australian pathology of 11%, in Germany of 10%, in the UK of 6%, in Switzerland of 1%, in Belgium of 12% and in (Australian) radiology of 11%. However, Sonic Clinical Services saw revenue fall 10%.

During the year it also made three European acquisitions for an enterprise value of A$890 million. Sonic Healthcare is currently progressing “several” new acquisitions and contract growth opportunities.

Medium-term earnings growth

Sonic thinks profit can grow as it grows its base revenue, which excludes COVID-19 revenue, which can help operating leverage (and hopefully the Sonic Healthcare share price).

Revenue and earnings from recent acquisitions, as well as synergies, should help net profit.

There’s fee indexation for Sonic Healthcare’s services in various markets and services, including radiology, the UK and Belgium, which can help earnings.

It’s also looking to combine laboratories in places like Germany (Hamburg and Munich), which can help reduce costs and boost margins.

Sonic is expecting digital pathology and AI to enhance efficiencies in anatomical pathology.

Outlook for the Sonic Healthcare share price

It gave a guidance range for EBITDA of between $1.7 billion to $1.8 billion – this would be growth of up to 5%, or, at worst, the same as last year. The base business performance is expected to offset the “material reduction” in COVID-19 related earnings.

To me, Sonic Healthcare is one of the most effective healthcare shares at delivering dividend growth and long-term earnings growth. The combination of organic revenue growth and acquisitions is working well.

I think the long-term looks very promising for the company.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report — or get it emailed to you — for FREE by CLICKING HERE NOW or the button below.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
Skip to content