HealthCo Healthcare and Wellness REIT swings to full-year loss
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The news: HMC Capital’s HealthCo Healthcare and Wellness REIT has swung to a full-year loss as the fund continues efforts to re-tenant its 11 Healthscope hospitals after the private hospital owner fell into receivership earlier this year.
The numbers: HealthCo reported a statutory loss of $89.3 million, down from the $7.3 million statutory profit recorded in the previous year.
Funds from operations (FFO) came in at $36.5 million, or 6.6 cents per unit, which was 18% lower than the $45.3 million, or 8 cents per unit, reported in FY24. Distributions per unit (DPU) were 4.2 cents, compared to 8 cents in FY24.
The market consensus estimate for statutory profit, according to Visible Alpha, was $24.4 million. Analysts expected FFO of $43.6 million, or 7.8 cents per unit, and DPU of 4.2 cents.
The context: HealthCo suspended its second-half distributions to "maintain balance sheet flexibility" as it works with Healthscope's receiver to re-tenant the 11 freehold private hospitals it co-owns with HMC's Unlisted Healthcare Fund (UHF).
"It is expected that distributions will recommence once the Healthscope situation has been resolved," the company said in its earnings release.
"[HealthCo] does not intend to issue guidance until such time."
HealthCo confirmed that all contracted rent has been paid on the 11 hospitals, after signing a rent deferral agreement with Healthscope in May, and all sites continue to operate as normal
What they said: HMC Capital's managing director for real estate, Sid Sharma, commented: "We are focussed on the community needs for maintaining continuity of services across all the assets and to ensure patients and hospital staff are prioritised through an orderly transition to new tenants".
"Our conviction in private hospitals as an asset class and our own hospitals remains unchanged."
