Ramsay Health Care shares sink after dividend cut

The news: Shares of private hospital operator Ramsay Health Care fell sharply after the private hospital operator reported it had boosted annual profit by 8.8% but cut its final dividend almost in half.

The numbers: Ramsay posted a statutory net profit after tax of $298.1 million, up from $274 million in FY22, while total revenue grew 11.6% to $15.3 billion. The healthcare provider slashed its final dividend 48.5% to 25 cents, taking its final dividend to 75 cents per share, down from 97 cents the year before and representing a 60% profit payout to shareholders. Investors were unimpressed, sending RHC stocks tumbling 10.2% to $49.68 by 11:05am AEST.

The context: Growth in revenue was led by improved surgical admissions and a slower recovery in non-surgical admissions as pandemic disruptions normalised and labour shortages improved. At the height of the pandemic, governments asked private hospitals to delay elective surgery to free up space for potential influxes of COVID-19 patients.