Insights

Ramsay Health Care (ASX:RHC) share price on watch after Q1 update

The Ramsay Health Care Limited (ASX:RHC) share price will be on watch today following the release of its first quarter update…
The post Ramsay Health Care (ASX:RHC) share price on watch after Q1 update appeared first on Motley Fool Australia. –

The Ramsay Health Care Limited (ASX: RHC) share price will be on watch this morning following the release of an announcement.

What did Ramsay announce?

In response to the ongoing impact of the COVID-19 pandemic on its operations, this morning Ramsay provided an update on trading across the business during the first quarter of FY 2021.

Ramsay’s Managing Director and CEO Craig McNally, commented: “Ramsay’s operating results continued to be impacted by the COVID-19 pandemic in 1Q FY’21. Surgical restrictions, regional outbreaks and lower demand for some services, combined with higher costs associated with operating in the current environment, have all impacted the results.”

How are its businesses performing?

According to the release, Ramsay Australia reported a 1.5% increase in total revenue during the first quarter. This reflects a 1.7% increase in surgical admissions and lower non-surgical activity.

A major drag on its performance was its Victorian operations. Excluding Victoria, total Australian revenue was up 6.6% and surgical admissions rose 8% over the prior corresponding period.

These operations also weighed heavily on Ramsay Australia’s earnings before interest, taxes, depreciation, amortisation and restructuring or rent costs (EBITDAR), which was lower than the prior corresponding period.

Management notes that this was due to restricted surgical activity in Victoria, increased costs, and reduced procurement benefits as a result of operating in a COVID safe environment. Also weighing on its performance was a negative mix impact from the decrease in medical, mental health, and rehabilitation case volumes.

The Ramsay Santé business saw an increase in surgical activity in the first quarter. Management revealed that volumes increased 5.4% over the prior corresponding period in France as clinicians sought to reduce the backlog of surgeries created by the first COVID-19 lockdown.

The Nordic region also reported growth in surgical volumes in recent months. Though, demand for other services has been below the prior period due to the impact of COVID-19.

After a slow start to FY 2021, the company revealed that its Ramsay UK business has experienced a recovery in private work in recent months. This is being driven by private health insurers and clinicians moving to reduce the surgical wait lists, and a recovery in demand for other services such as oncology flowing from the public system.

Nevertheless, total Ramsay UK revenue for the first quarter was down 9.9% on the prior corresponding period in local currency.

Finally, over in Asia the company revealed that movement control orders have impacted patient volumes. One positive, though, is that its diagnostic pathology services in Indonesia and Malaysia have benefitted from an increase in COVID-19 PCR testing as a result of a second wave in both countries.

Outlook.

Mr McNally warned that the near term will be tough for Ramsay but he remains very positive on its long term outlook.

He said: “Given the near-term uncertainties in the market, we are not in a position to provide guidance for FY’21. Notwithstanding the current environment, over the medium to long term the health care industry fundamentals remain positive.”

“Ramsay is well positioned to capitalise on the shifting industry dynamics in each of our key markets. Following the recent equity raising, the Company has a strong balance sheet to support new opportunities as they arise,” concluded Mr McNally.

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Ramsay Health Care (ASX:RHC) share price on watch after Q1 update appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!