This CEO's laser focus is on paying down debt and creating a leaner business

If there is one sector in the Australian market that is in need of a return to normal, it's the healthcare sector. Before the COVID-19 crisis ever hit, the national health system was already facing challenges given the ageing population, increases in chronic disease, and a shortage of qualified carers. 

While the health emergency has subsided, many uncertainties remain. The shortage of qualified carers and professionals has exacerbated. Cost inflation and the cost of raising capital are now both higher. The rise of virtual healthcare services has also meant that these services are now in greater demand.

For publicly-listed companies like Ramsay Health Care (ASX: RHC), it must navigate all these pertinent issues and keep shareholders happy. In its full-year result, Ramsay's management noted that the costs from the COVID-19 pandemic are "expected to continue in the business for the foreseeable future". And while profits and revenues are higher off the back of increased demand for its surgical services, both were a miss against analyst expectations. In addition, its dividend was cut by nearly 50% in nominal terms even as it's been clear that investors are in no mood to hear that payouts are being slashed.

To discuss the result, and most importantly, what happens from here, I was delighted to be joined earlier this week by Craig McNally, Ramsay Health Care MD and Global CEO. 

Note: This interview was taped on Thursday 24 August 2023, just hours after the Ramsay full-year result was released to the market.

Timestamps

• 0:00 - Introduction
• 0:29 - Key takeaways from the earnings report
• 1:02 - The COVID-19 effect on earnings
• 1:34 - How does Ramsay Health Care plan to combat macro headwinds?
• 2:41 - Ramsay and its takeover battles
• 3:22 - Why does Ramsay want to explore selling its stake in the Ramsay Sime Darby project?
• 4:52 - Future priorities for Ramsay
• 5:11 - More information on the Ramsay transformation plan
• 6:00 - Why the dividend was smaller and the payout ratio held steady

Catch all of our August 2023 Reporting Season coverage

The Livewire Team is working with our contributors to provide coverage of a selection of stocks this reporting season. You can access all of our reporting season content by clicking here.

For our coverage of the Ramsay result itself, you can read Kym Sheehan's debut wire here:

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Ramsay Health Care: Peddling uphill through inflationary cost pressures

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