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Healthscope plunges after profit slump

Marnie Banger  |  24 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Shares in private hospital operator Healthscope (ASX: HSO) have fallen to a record low after its full-year profit dropped 39 per cent to $110.9 million, affected by an impairment from the sale of its medical centres business and other costs.

Healthscope on Wednesday announced a 3.4 per cent lift in revenue to $2.37 billion in the year to June 30, but profit was hit by a $54.7 million impairment from the medical centres sale.

The company revealed last week it was divesting the centres to Fullerton Primary Care in order to focus on its core hospitals and pathology businesses.

Healthscope on Wednesday said $17.4 million in other expenses, including an impairment of assets at its Geelong Private Hospital and corporate restructuring, also hit the bottom line.

The company's biggest division—hospitals--grew operating earnings by 1.3 per cent to $359.4 million.

Healthscope chief executive Gordon Ballantyne said the division was hit by softer markets and higher operational costs, which in some cases grew faster than private health fund rebates.

Healthscope said it expects flat earnings growth in the 2017/18 financial year, as volatility and cost pressures in the Australian private hospital market continue.

The company's final dividend is an unfranked 3.5 cents per share, down from 3.9 cents per share last year.

Healthscope shares closed down 33.5 cents, or 15.3 per cent, at an all-time low of $1.855 on Wednesday.

ONE-OFF COSTS HIT HEALTHSCOPE PROFIT

* Net profit down 39pct to $110.9m

* Revenue up 3.4pct to $2.37bn

* Final dividend down 0.4 cents to 3.5 cents, unfranked

 

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