Ramsay Health Care Profit Up 14%, Overseas Expansion Gathers Pace

   By Rebecca Thurlow 
 

SYDNEY--Ramsay Health Care Ltd. (RHC.AU) said its annual net profit rose 14% as it expanded its international network of hospitals with a series of acquisitions in France and Malaysia.

The private hospital operator reported a net profit of 303.8 million Australian dollars (US$283.6 million) for the year through June, up from A$266.4 million a year earlier. Core net profit, a measure that strips out amortization and intangible items, rose 19% to A$346.2 million, beating the company's guidance for a 16% to 18% rise.

Ramsay said it expects core net profit and core earnings per share to rise by 14-16% in the current financial year as it continues to focus on acquisitions and expanding existing facilities.

"Ramsay Health Care has now established a strong position in a number of overseas markets," said Managing Director Christopher Rex.

"We also look forward to producing increased benefits from our successful capacity expansion programme in Australia given the continuing strong demand for health services in this country." he said.

Ramsay said it will pay a final dividend of 51.0 Australian cents a share, up from 41.5 cents a year earlier.

Ramsay's shares have more than doubled in value over the past two years, as investors clamor for health-care stocks as Australians spend more on everything from doctor's visits to over-the-counter drugs. Australia's government has also pinpointed health care as a growth industry capable of cushioning the impact on the economy of declining mining investment.

The company, which has a market value of around A$10 billion, operates 151 hospitals and day surgery facilities across Australia, the U.K, France, Indonesia and Malaysia.

Earnings before interest and tax from the Australian and Asian business grew by 15% to A$480.2 million as recently built or expanded facilities began to contribute revenue. Demand for Ramsay's services is expected to continue to grow in coming years as the population continues to age and a greater proportion of people visit private hospitals, analysts say. The company opened a new hospital in Australia's Queensland state during the year and expanded sites in other parts of the country.

Ramsay has also been growing its international portfolio by buying hospitals overseas. In June, Ramsay and its French joint venture partner agreed to buy a controlling stake in General de Sante SA (GDS.FR), positioning the Australian company as the largest private-hospital operator in France.

Ramsay agreed to pay EUR429 million (US$566 million) for its share of the acquisition. Generale de Sante has 75 healthcare facilities, including 61 hospitals, and about 19,000 employees, and brings Ramsay's portfolio in France to 115 facilities and 15,400 beds. The deal was Ramsay's fourth acquisition since it bought 57% of French hospital operator Groupe Proclif in 2010.

Other deals during the year included the acquisition of three hospitals in Malaysia in a joint venture with Sime Darby Bhd. (4197.KU) and the purchase of 30 psychiatric facilities in France.

- Write to Rebecca Thurlow at [e-mail]

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