The Ramsay (ASX:RHC) share price is sliding on third quarter update

The Ramsay Health Care Ltd (ASX: RHC) share price edges higher on a credit rating update and solid third quarter results
The post The Ramsay (ASX:RHC) share price is sliding on third quarter update appeared first on The Motley Fool Australia. –

white arrow dropping down

The Ramsay Health Care Ltd (ASX: RHC) share price is falling this morning. This comes after the company announced key new information and updates within its presentation at the Macquarie Australia Investment Conference. 

At the time of writing, the Ramsay Health Care share price is trading for $66.62. down 0.7%.

What might drive the Ramsay share price 

Credit rating update

Credit rating agency Fitch has accredited Ramsay with an investment-grade credit rating of BBB (stable). 

Ramsay CFO Martyn Roberts said in response to the company’s first international credit rating: 

Achieving this credit rating is a positive first step in our program to diversify Ramsay’s sources of debt and extend and stagger the tenure.

Ramsay Australia update 

Ramsay Australia is the largest private hospital operator in Australia with 72 hospitals and an estimated market share of 27%. Additionally, Ramsay Australia contributed approximately 46% of the Group’s revenue in 1H21. 

Ramsay’s Australia division reported a 4.6% increase in total patient revenue for 3Q21. This was driven by a broad increase in services. In particular, this growth included surgical and non-surgical admissions, psych and rehab admissions, maternity volumes, and activity levels.

The update also noted that average costs per month associated with operating in a COVID environment are gradually reducing. However, the company is working through the higher cost of inventory acquired at the height of COVID. Furthermore, it will continue to be impacted by inflated costs for some items in the current environment. 

Ramsay UK update 

Ramsay UK experienced an 82% decline in revenues in 1H21 to $86 million from $493 million in 1H20. This decrease was due to capacity restrictions. From 1 January 2021 to 31 March, Ramsay has operated under a new volume-based agreement with the National Health Service England (NHS). This agreement utilised the capacity of 14 Ramsay hospitals during 3Q21. 

Ramsay continued to treat non-COVID NHS priority cases. However, continued strict lockdown conditions resulted in a 6.2% decline in admissions on the prior corresponding period. 

From a year-to-date perspective to 31 March 2021, admissions are tracking at approximately 83% of the prior corresponding period (pcp). The relaxation of lockdown restrictions in recent weeks has seen a recovery in the pipeline of private and self-funded patients. 

Ramsay Europe update 

Ramsay Europe is the second-largest private care provider in Europe. The company operates specialist clinics and primary care units in approximately 350 locations across five countries. Ramsay Europe contributed approximately 52.5% of the Group’s revenue in 1H21. 

In mid-March, the French Government started to restrict elective surgery capacity. The company reveals that the average capacity across all French facilities during March/April was 40%. As a result of elective surgery restrictions and COVID lockdowns, admissions for 3Q21 was announced to be “materially below” the pcp. 

Where to invest $1,000 right 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.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The Ramsay (ASX:RHC) share price is sliding on third quarter update appeared first on The 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!