Like so many companies this reporting season, private hospital operator Ramsay Health Care continued to battle Covid Delta and Omicron and their impact on staff, materials and business generally in the six months to December.
It’s been a battle the company – the country’s biggest private hospital operator and a significant player in the UK and Europe – has now been fighting with little respite for four half-year periods in a row.
And the company sees that problem – especially medical staff shortages – remaining a challenge across the globe for much of 2022 after revealing a 30% slide in profit for the December half to just under $159 million.
Even though the outlook was very cautious and not upbeat, Ramsay shares edged up 0.15% yesterday to end a rough day at $64.60. With the wider market off 2.99% because of Putin’s invasion of Ukraine, that wasn’t a bad performance.
The company told the market on Thursday that its numbers had been “severely impacted” by new waves of COVID-19, which increased costs, led to staff absenteeism and shut down elective surgeries in a number of its markets.
“The estimated total impact of the disruption related to COVID in the first half of 2022 was $107 million,” CEO Craig McNally said in the statement.
Staffing was an issue across Ramsay’s other markets as well, with higher personnel costs and employee absences rising as COVID cases surged.
While the company sees conditions improving in the near term in Australia, the performance of the businesses in Britain and Europe will depend on how well those regions manage ongoing staffing challenges, the company warned.
Ramsay has operations across Australia, Asia, the UK and Europe, and its hospital network has been lending its services to public health systems to support them through coronavirus surges since 2020.
“Our results in 2HFY22 will continue to be impacted by government imposed restrictions on capacity limiting our activity levels, combined with the additional costs of operating in the COVID environment. While surgical restrictions are now starting to ease in most of our regions we expect a transition period where our activities will continue to be disrupted by the impact of cancellations due to the availability of our people, doctors and patients and we incur the higher costs associated with staffing, PPE and procurement,” the company said in the statement.
“Volume is expected to increase as restrictions start to ease in most jurisdictions, however business activity in 2HFY22 is expected to continue to be volatile and costs will remain elevated”
Revenues for the December half were up 2.6% in constant currency terms at $6.7 billion for the six months, but profits declined 31.3% in constant currency to $158.9 million.
Results across all the group’s countries were “materially impacted” by the new wave of the pandemic, Ramsay said, which saw “restrictions on surgical capacity and the flow-on effects of isolation orders and movement restrictions on the availability of staff, clinicians and patients and the resultant impact on revenue and costs”.
Mr McNally said the disruptions from the lockdowns and the halt of selective procedures in Australia to make room in hospitals for COVID patients had been significant.
He said despite the significant interruptions, the fundamentals of his business remain strong, and the company was set “to benefit from the additional volume created by the growing backlog of surgical and non-surgical cases in all our regions”.
Ramsay completed its £775 million ($A1.1 billion) takeover of UK mental health care operator Elysium in January and has started to integrate the company into its operations which will take the rest of this year.
In a sign of confidence, the board left the interim dividend steady at 48.5 cents a share.
