Oceania Healthcare (ASX:OCA)New Zealand’s leading provider of aged care and retirement living services, operating 46 sites across the country, has announced its half-yearly financial results for the six months ended 30 September 2024.
The company reported a net loss of $17.1 million, in stark contrast to a profit of $35.2 million in the same period last year. A significant portion of the losses were due to a write-down of property, plant and equipment relating to the Elmwood care site in Auckland. This reduction in value resulted from the partial closure of buildings and the relocation of residents to newly completed healthcare facilities
Underlying EBITDA, which excludes one-time items and unrealized fair value adjustments, increased 2.7% to $38.6 million, driven by higher sales volumes and a 34.9% increase in capital gains at $38.2 million. Revenue from continuing operations was $132.6 million, up 0.8%, while operating cash flow grew 23.1% to $70.4 million. Basic earnings per share fell to -2.4 cents, reflecting the company’s losses in the period.
The company continued its portfolio modernization strategy, delivering 106 new healthcare facilities at Auckland’s Elmwood site and divesting four non-core sites for $25.1 million. Total assets increased to $2.82 billion and unsold shares fell 13.5% to $305 million. Debt gearing improved slightly to 37.5%, reflecting Oceania’s focus on deleveraging. Resales of independent living units and care suites remained strong, with 169 units sold, and sales of new care suites exceeded expectations with 51 units sold.
CEO Suzanne Dvorak, who joined the company in July 2024, highlighted the need to improve sales, increase the profitability of support services and streamline development plans. The appointment of a Sales and Marketing Director highlights Oceania’s focus on managing unsold stock and increasing revenues. The board suspended dividends, citing the need to reduce debt and improve financial flexibility before resuming payments.
Shares closed 9.68% lower at 70 cents on Friday.