Insights

Why the Ramsay Health (ASX:RHC) share price is up 8% today

The Ramsay Health Care Ltd (ASX: RHC) share price is flying 8% higher today after the private hospital operator reported its half results.
The post Why the Ramsay Health (ASX:RHC) share price is up 8% today appeared first on The Motley Fool Australia. –

healthcare asx share price rise represented by happy doctor

The Ramsay Health Care Ltd (ASX: RHC) share price is up 8% this morning after the global private healthcare company reported its half-year results.

Prior to open, Ramsay’s share price was sitting at $63.28. At the time of writing, the share price stands at $68.44. The share price has been impacted over the last 12 months, falling 18.3%, with COVID-19 creating a challenging environment. It appears the market was originally preparing for weaker results.

What’s moving the Ramsay Health share price?

Ramsay Health struggled through the half, with restrictions and lockdowns continuing in some of its operational regions. The impact of this was reflected in the 6.6% decline in operational revenue during the half-year. Additionally, lower demand for non-surgical services added to the dampened result.

Looking locally, Australian operations resulted in earnings before interest, tax, depreciation, and amortisation (EBITDA) of $402 million, a reduction of 21% compared to last year. Restrictions on capacity and increased costs associated with the COVID environment were held responsible for the decline.

Luckily, Ramsay experienced lifts in EBITDA across Europe and the United Kingdom. This was mostly due to cost controls and cost support payments by governments. Importantly, this levelled out EBITDA for the group to $1.039 billion, a slight reduction of 1%.

Lastly, the board has nominated to resume dividend payments to shareholders. Ramsay has declared a fully franked dividend per share of 48.5 cents, which indicates a 50% payout ratio. This decision has been made as the board holds confidence in the strong cash flows of the business.

Ramsay’s light at the end of the tunnel?

Ramsay has indicated that the second half will be highly contingent on how the COVID-19 situation transpires. Vaccine rollouts have reduced the number and severity of cases based on early data. However, uncertainty remains.

The private hospital operator expects to continue investing in expanding the company’s footprint. Notably, during the half, Ramsay sold 9 facilities in Germany and 2 in France.

Ramsay expects that surgeries placed on the backburner during COVID-19 disruptions will drive volumes over the next half. Some of these surgeries will also be from public waitlists, as Ramsay helps alleviate the public sector pressure.

Finally, the company provided no guidance for FY21 due to the ongoing uncertainty. It seems that shareholders are not quite out of the woods yet.

CEO commentary

CEO and managing director, Craig McNally, provided commentary on today’s first-half results:

The result reflects the operational and financial resilience of the Ramsay business. Despite the disruption caused by the pandemic, we continued to invest in the business across all regions as we look to maintain our competitive advantage and optimise our portfolio of facilities

The Ramsay Health share price has unsurprisingly suffered downward pressure in the last year. Underperforming the broader market, Ramsay suffered a 15.4% fall over the 12 months gone.

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 Mitchell Lawler owns shares of Ramsay Health Care Limited. 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 Why the Ramsay Health (ASX:RHC) share price is up 8% today 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!