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 improved 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%; a $618m profit after tax was realized from the sale of Ramsay Sime Darby, 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 programs, digital investments, and sustainability initiatives continued, though some were slowed or deferred to ensure business readiness and risk mitigation.

• Significant shareholder value was realized from the Asian joint venture sale, and progress was made on gender diversity and emissions targets.

Financial highlights

• Total revenue from contracts with customers was $16,660.2m, up 11.3% year-over-year; constant currency growth was 7.3%.

• EBIT from continuing operations increased 6.1% in constant currency (excluding non-recurring items), while underlying NPAT rose 24.5% year-over-year.

• Net financing costs increased, mainly due to higher base rates and negative mark-to-market movements on interest rate swaps.

• A fully franked dividend of 80cps 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

• NPAT and activity from continuing operations are expected to grow in FY25, though at a slower rate than FY24 due to cost of living pressures and public sector budget constraints.

• Margin recovery will be impacted by further investment in digital/data and ongoing wage/tariff indexation gap.

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

• CapEx for FY25 is forecast at AUD 780–900 million, focused on brownfield expansion in Australia and new facilities in Europe.

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