Oceania Healthcare (OCA) H1 2025 earnings summary

Executive summary

• Underlying EBITDA rose 2.7% to $38.6m for HY25, with strong operational cashflow and asset growth, while focus shifted to selling down unsold stock and reducing gearing.

• CEO Suzanne Dvorak appointed in July 2024, prioritizing sales execution, debt reduction, and portfolio modernization.

• Portfolio rebalancing targets a 50/50 split between independent living and care assets, with divestments and new developments shifting toward premium care and retirement units.

• Dividend remains paused due to gearing, with resumption expected after sufficient stock sell-down and leverage reduction.

• Sustainability initiatives advanced, including SBTi-validated GHG reduction targets and recognition in the Deloitte Top 200 Awards.

Financial highlights

• Underlying EBITDA increased 2.7% year-over-year to $38.6m, with strong capital gains and occupancy.

• Operating cashflow rose 23.1% to $70.4m, driven by a 59.8% increase in new ORA receipts.

• Underlying NPAT was $24.0m, down 12.5% year-over-year, while realised capital gains grew 34.9% to $38.2m.

• Gearing reduced to 37.5%, with all banking covenants met and ICR at 4.2x (covenant: 2x).

• Net debt headroom is just under $100m; blended interest rate on retail bonds is 2.7%.

Outlook and guidance

• Focus remains on accelerating sales, especially at high-value sites, and reducing unsold stock to lower gearing.

• Board will revisit dividend resumption in March, with gearing and sales as key determinants.

• Cost reduction target of $5–7m for FY2026, with a $5m right-sizing program underway.

• No new major development stages will commence until successful sell-down of current stock; development pipeline transitioning to villa products.

• 224 independent living units and care suites to be delivered in FY25, with strong application volumes into the Christmas period.