Ramsay Health Care (ASX:RHC) resumes dividends as profit slides 12.5pc

• Ramsay Health Care (RHC) has reinstated its dividends despite a COVID-driven drop in half-year net after-tax profit
• With increased confidence in its balance sheet and cashflow, the company will return 48.5 cents per share to its shareholders
• Operational restrictions across the company’s core regions combined with lower demand for non-surgical services culminated in a 6.6 per cent drop in revenue from patients
• As such, net profit decreased from $258.4 million last year to $226 million
• The company said it future results will be tied to the shape of the pandemic’s curve and the success of vaccination programs worldwide
• Ramsay Health Care is up 6.45 per cent to $67.36 per share

Ramsay Health Care (RHC) has reinstated its dividends despite a COVID-driven drop in half-year after-tax profit.

Australia’s largest private hospital operator reported marginal declines across the board but said that, with increased confidence in its balance sheet and cash flow, it would return 48.5 cents per share to its shareholders.

This amount represents roughly 50 per cent of Ramsay’s statutory profit, which fell 12.5 per cent from $258.4 million in the six months ending December 31, 2019, to $226 million this year.

It follows a 6.6 per cent drop in revenue from patients, as operational restrictions across Australia, Europe and the U.K. combined with lower demand for non-surgical services shaved off earnings.

In Australia, revenue from patients increased 0.5 per cent. Excluding Victoria, which was heavily hit by widespread restrictions, revenue grew 4.9 per cent.

It was a different story in the U.K., however, where revenue from patients fell 82.5 per cent compared to last year.

Ramsay said its results for the second half of financial 2021 will be tied strongly to the shape of the pandemic’s curve and the extent to which each region can operate with an unrestricted capacity.

Initial data from some of the more advanced vaccination programs around the world show that the shots are reducing the number and severity of cases, but Ramsay added that a number of uncertainties remain with the rates of vaccination and longer-term clinical outcomes.

“While the rollout of the vaccine gives us optimism that some normalcy in operating conditions and capacity will return, in light of the risks associated with further spikes in COVID cases, and the flow on impact to our facilities, we are not in a position to provide FY21 full year guidance,” said Managing Director and CEO Craig McNally.

Ramsay Health Care is up 6.45 per cent to $67.36 per share at 2:31pm AEDT.