Ramsay warns of weaker underlying earnings

Private hospital operator Ramsay Health Care (ASX:RHC) has warned that write-downs and impairment charges on some of its European operations will weaken its underlying results for 2023-24 compared with the previous year.

However, the gain from the sale of Sime Darby will significantly increase statutory profit.

Ramsay expects net profit from continuing operations of $265 million to $270 million in the year to June. That is lower than the profit of A$278.2 million reported for 2022-23.

Statutory profit is likely to be between $884 million and $889 million, including a gain of $618 million from the sale of Ramsay Sime Darby.

In Monday’s regulatory filing, Ramsay reported non-cash write-downs and accelerated write-downs of $24.5 million against the book value of non-performing assets in both Ramsay Santé and the UK region.

However, Ramsay said the company was benefiting from improved activity and labour productivity, while capital expenditure in 2023-2024 was lower than forecast at around $740 million due to unexpectedly low spending in Australia.

Ramsay is due to confirm the results of the 2023-24 season on August 30.