Hospitals operator Ramsay Health Care Limited (ASX:RHC) shares dropped 14% to $32.62 on Thursday after reporting a 97% fall in profit to $24 million, with guidance signalling further weakness.
The result included a $281.3 million negative contribution from non-recurring items, driven largely by a $291 million non-cash impairment on the UK region, reflecting ongoing underperformance of the Elysium Healthcare business.
RBC Capital Markets analyst Craig Wong-Pan said the share price weakness was expected, citing lower earnings in both Australia and the UK, headwinds from a new funding agreement at the Joondalup campus, and higher-than-expected net financing costs.
Ramsay reported FY25 total revenue of $1.78 billion, in line with expectations, though profit missed consensus estimates of $70 million. Underlying profit of $305 million was in line with forecasts and 2% higher than FY24.
Looking ahead, management flagged activity growth across all regions in FY26. Wong-Pan noted that Australian EBIT growth was expected, though management had highlighted a $37 million negative impact from a new Western Australian funding mechanism. Net financing expense is forecast between $600 million and $620 million, compared with consensus of $594 million.