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ASX earnings wrap: Atlas Arteria's profits rise, Ramsay Healthcare cuts dividend

EditorOliver Gray
Published 29/02/2024, 02:05 pm
Updated 29/02/2024, 02:05 pm
© Reuters

Investing.com - Ramsay Health Care Ltd (ASX:RHC), a private hospital operator, has announced a 20% cut in its interim dividend in response to escalating inflation in the medical sector. The dividend has been reduced to 40¢ per share, a significant drop from 50¢ per share a year ago.

CEO Craig McNally admitted that the soaring inflation in the medical industry is posing substantial challenges to the company's margin recovery. Nevertheless, the company has seen some financial relief thanks to a weaker Australian dollar, which has boosted offshore earnings from the UK and Europe when converted back to Australian currency.

Ramsay recently announced a first half net profit of $758.5 million, a substantial increase from $290.2 million a year earlier. This surge in profit was largely driven by the sale of its Asian joint venture, Ramsay Sime Darby, which was finalised in late December. The company also reported a 10.5% increase in total revenue, amounting to $8.16 billion.

McNally emphasised that the high inflation rate in the healthcare sector, particularly in wages and medical consumables, continues to affect the pace of margin recovery. He added that tariff increases have only partially compensated for these cost hikes.

Meanwhile, Star Entertainment Group Ltd (ASX:SGR), a beleaguered casino operator, has reported a net profit of $9.1 million, despite ongoing regulatory hurdles and a dip in consumer spending. The company's revenue for the fiscal half-year fell by 14.6% to $865.7 million.

Star Entertainment reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $113.6 million, excluding significant items. Despite the challenging period, CEO Robbie Cooke stated that the company had achieved several key milestones.

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Cooke stressed that remediation remains their top priority. He highlighted the company's ongoing efforts to improve risk management, promote safer gambling, and enhance Anti-Money Laundering (AML) capabilities. He also emphasised the company's focus on instilling greater accountability and robust governance.

Cooke expressed his support for the inquiry in New South Wales, which is set to assist the NICC in deciding whether further actions should be taken against The Star Pty Ltd, which holds Star Entertainment's NSW licence.

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Atlas Arteria (ASX:ALX), a toll road operator, has reported a 6% increase in its annual net profit, reaching $356.3 million. This profit growth was largely driven by increased traffic on most of its toll roads across Europe and the US, with the exception of the recently acquired Chicago Skyway, which experienced a 7.2% decrease in traffic compared to the previous year.

Atlas Arteria stated that the traffic decline was lower than expected and that the rise in toll fares had positively impacted the revenue of the Chicago toll road. The company also benefited from the depreciation of the Australian dollar against the US dollar and the euro.

Despite the rise in profits, Atlas Arteria announced a total dividend of 40¢ per share for the year, a decrease of 0.5¢ from the previous year. The company also indicated to investors that they can expect total dividends of 40¢ per share in 2024.

Finally, retail giant Harvey Norman Holdings Ltd (ASX:HVN) reported a significant 45.7% decrease in its adjusted profits before tax (excluding property revaluations), totalling $239.1 million for the six months ending December 31. Despite this, the company saw a slight 1.1% increase in its total net assets over the period, reaching $4.5 billion. Additionally, its net debt to equity ratio decreased to 10.75%

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