Highlights:
- Healius reported 31.6% fall in the total revenue to AU$617.5 million during the four months to October 2022.
- EBITDA during the sated period fell by 64.2% to AU$124.3 million.
Diagnostic services provider Healius Ltd (ASX:HLS) on Monday (28 November 2022) shared a trading update for the four months to October 2022. During the year-to-date financial year 2023 (YTD FY23), the healthcare company posted a 31.6% fall in total revenue and a 64.2% fall in EBITDA. The revenue BAU (business as usual) increased by 5.8% on the prior corresponding period.
Shares of Healius have been buzzing in the red territory since the morning. At 11:40 AM AEDT, the shares were spotted trading 3.26% lower at AU$3.26 per share with a market capitalisation of AU$1.95 billion. Meanwhile, ASX 200 Health Care index was 0.074%, up at 43,189.00 points (at 12:02 PM AEDT).
Reason behind the fall in YTD FY23 revenue
Healius has listed the headwinds that are currently witnessed by the health sector and the economy.
- Shortage of staff in frontline roles.
- Shortage of general practitioners (GP) and a fall in GP bulk billing rates.
- Increase in the tests requested per GP referral in comparison to the historical number after a hiatus in regular testing during Covid-19. This increases coning under the Medicare Benefits Systems.
According to ASX announcement, Covid-19 testing has decreased from 13,000 tests per day in July to 3000 – 4000 in October and November. Healius said that an industry-wide fall in Covid-19 polymerase chain reaction (PCR) testing had impacted the Covid-related revenue. As reported, the Covid revenue dropped by 85.4%. To handle this demand shift, the company is adjusting its cost base.
Imaging revenue grew by 8.6% on pcp, and Healius said it is growing faster in November. The company said that growth in Imaging revenue is above-market, driven by investment in consumer-facing digital services and public hospital contract wins.
Sustainable Improvement Program (SIP) of Healius
In FY22, the company reported significant progress in its SIP, such as optimising the collection entre footprint to increase margin per centre and average revenue. With the aim of reducing costs, the company re-engineered its lab processes and back office. Tools were introduced to manage labour in-line with demand.
During the annual general meeting, the company said that the company expects to exit FY23 with a target margin of 13 to 14%, under the assumption that BAU volumes continue to recover according to expectations.