Aged inquiry takes toll on Estia

ASX-listed aged care provider Estia has delivered a downbeat outlook for its performance.

Estia reports a big expected drop in earnings for the 2020 financial year.

ASX-listed aged care provider Estia has delivered a downbeat outlook for its performance while warning that accounts of abuse and neglect brought to light at hearings this year had hurt sentiment on the sector.

As the aged care royal commission entered another week of public hearings in Canberra, Estia on Monday flagged earnings for the 2020 financial year, excluding its new homes at Southport and Maroochydore, at between $78m and $82m.

That’s down from last year’s earnings of $94m.

Estia told the market its occupancy at the end of last month fell to 93.5 per cent across a portfolio of 5944 beds, a 0.6 per cent fall since mid-August.

“It is now not anticipated that the dynamics and sentiment will improve materially in the short term,” the company said.

Estia said revenue had also been hit by the reduction in the maximum permissible interest rate and competitive pressures.

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Its warning came just a week after a report from a lead industry advocate revealed almost 200 nursing homes and about 50,000 residents countrywide were operating at an unacceptably high risk of insolvency.

It has been a rough year for the industry, with every aspect of its operation put under the microscope during more than 15 weeks of royal commission hearings. The interim report ­delivered early last month called out three issues for urgent attention: more funding for high-need, in-home care; dealing with the use of chemical restraints; and getting 6000 young disabled people out of nursing homes.

Shares in Estia finished down 7 per cent to $2.48 on Monday, a nine-month low and a 22 per cent discount to its levels before the inquiry was announced in September 2018.

Japara Health fell 3.3 per cent to $1.04, while Regis Healthcare was flat at $2.79 on Monday.