Ramsay Health Care (RHC) H2 2024 earnings summary

Executive summary

• Group revenue from patient activity grew 7.3% in constant currency, driven by 3.4% growth in hospital admissions and activity across all regions, though growth slowed in the second half due to macroeconomic pressures.

• Net profit after tax from continuing operations rose 2.4% to $270.6m, with underlying NPAT (excluding non-recurring items) up 24.5%.

• The sale of Ramsay Sime Darby generated AUD 618 million in net profit after tax, strengthening the balance sheet and reducing leverage to 2x.

• Productivity improved toward pre-COVID levels, with labor costs as a percentage of revenue declining by 100 basis points despite wage inflation.

• Transformation, digital, and sustainability investments continued, with progress on gender diversity and emissions targets, though some programs were slowed for risk mitigation.

Financial highlights

• Total revenue from contracts with customers was $16,660.2m, up 11.3% year-over-year.

• Group EBIT from continuing operations increased 6.1% in constant currency, and underlying NPAT rose 24.5% after adjusting for non-recurring items.

• EBITDA from continuing operations was $2,125.7m, up 6.2%; EBIT was $997.6m, down 0.4% due to non-recurring items.

• Net financing costs increased 42.7% in constant currency, mainly due to higher base rates and negative mark-to-market movements on interest rate swaps; net financing costs (excl. lease costs) were $297.9m, up 14%.

• A fully franked dividend of AUD 0.80 per share was declared, up 6.7% year-over-year, with a payout ratio of 72%.

• Operating cash flow was AUD 1.3 billion, consistent with the prior year.

Outlook and guidance

• Activity and NPAT from continuing operations are expected to grow in FY 2025, though at a lower rate than FY 2024 due to cost of living pressures and public sector budget constraints.

• Margin improvement in Australia is expected to be offset by increased digital and transformation costs; U.K. EBIT growth will be challenging due to low tariff indexation and high wage inflation.

• FY25 net interest expense is forecast at $590-620m; dividend payout ratio expected at 60-70%.

• CapEx for FY 2025 is forecast at AUD 780–900 million, with a disciplined approach to new projects and increased hurdle rates, focused on brownfield expansion in Australia and new facilities in Europe.

• Ongoing review of the portfolio aims to unlock value and drive improved performance.