Sonic Healthcare profit falls as COVID testing boom fades

The news: Sonic Healthcare recorded a 50% drop in full-year net profit as its COVID-related revenue fell by almost $2 billion from the year before. Its share price fell more than 5% after the announcement.

The numbers: Sonic recorded a net profit of $685 million, down from $1.47 billion a year earlier, as COVID testing revenue fell from $2.43 billion to $485 million over the same period. Base business revenue was up 11%. Despite the change in fortune, Sonic directors declared a 62 cents per share fully franked dividend, up from 60 cents last year.

The context: Sonic's numbers are normalising after a two year profit boom from COVID testing at its network of pathology laboratories. Sonic is a major player in Australia's concentrated pathology industry, an estimated 80% of which is owned by Sonic, ACL and Healius, according to the Australian Financial Review.