Covid crimps Ramsay recovery by $195m

The takeover bid launched for the listed healthcare operator rated barely a mention in the company’s latest results.

Ramsay noted it was starting to see a lift in activity levels as surgical restrictions come off and activity returns. Picture: Nat Salloum

Surgical restrictions, staff absenteeism and significant cancellations due to the pandemic have put a $195.5m hole in Ramsay Health Care’s local bottom line for the nine months to March 31.

The company, the target of a $20bn takeover bid from private equity group KKR, reported a deep fall in earnings for the period – down 23 per cent to $190m compared to the same quarter last year – on Friday.

Total revenues rose 5.7 per cent to $3.4bn. Profits in the period fell 59 per cent to $42.7m for the same three months in 2021.

Craig McNally, the company’s chief executive, said while there had been “significant levels of disruption in the business”, it was “starting to see activity levels rise as surgical restrictions lift”.

Shares fell 44c to $81.11. They have surged since last week after KKR, and a consortium of superannuation funds led by HESTA, lobbed an $88 per share bid.

The company said its ability to operate was hampered in the three months to March 31 by surgical restrictions and cancellations at short notice due to patient, clinician and staff isolation needs.

There were also restrictions on some surgeries in NSW and Victoria – which lifted in February – while some limits remain in place in Western Australia.

Surgical admissions for the quarter were down 9.1 per cent compared to 2021, with a recovery in volumes in March impacted by the new WA restrictions.

In the United Kingdom, earnings are off by 136 per cent because of non-recurrent items including $24.7m in transaction costs, and a $18.9m inventory write down.

While cancellations in the UK remained high, the company said time lost to Covid-19 was reducing and admissions improving.

Mr McNally said long-term trends would support the business as ageing and health issues set in.

He said Ramsay expected 2024 to deliver the company it’s first “normal” year since 2019.

“We are however really positive about what the future is when we come out of the volatile period,” Mr McNally said.