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AUSTRALIA'S HEALTHSCOPE BOOKS LOWER ANNUAL NET PROFIT

Wed. August 20, 2008; Posted: 08:42 PM
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MELBOURNE, Aug 21, 2008 (AsiaPulse via COMTEX) -- HSCPF | Quote | Chart | News | PowerRating -- Hospitals operator Healthscope Ltd (ASX:HSP) says it has had a positive start to the 2009 financial year, after booking a lower reported annual net profit of $A64.4 million ($US56.16 million) for 2007/08.

The reported bottom line result was 23.3 per cent down on the net profit of $84.0 million in the prior year.

But net profit after tax from continuing operations, before non-recurring items, was $74.9 million, up 14 per cent on the prior year.

"We have had a good start to full year 2009, with the hospitals experiencing strong demand and the pathology group building on the significant growth of the second half of full year 2008," Healthscope said.

"It is not expected that the changes to the Medicare surcharge levy threshold level announced in the federal budget will impact earnings in the next period, with underlying volume growth in hospitals remaining strong, and health fund agreements in place with most major health funds for terms to run varying from one to three years."

The company said it would provide further guidance at its annual general meeting in October.

Healthscope declared a final dividend of ten cents per share, bringing the total dividend for the year to 19.5 cents, compared to a total of 17.5 cents in 2007.

Revenue rose 16.3 per cent to $1.49 billion.

Non-recurring items reduced the group result by $10.4 million.

The non-recurring items primarily related to costs incurred in Healthscope's failed attempt to take over Symbion Health, which was successfully acquired by Primary Health Care Ltd.

The prior year's result had been boosted by a $15.1 million gain on the sale of some hospitals and a $2.9 million contribution from divested hospitals.

Healthscope said strong revenue growth, improved margins in core hospitals, contributions from acquisitions and improved performance of the pathology group in the second half contributed to the higher underlying result.

Earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations rose 15 per cent to $197.9 million.

The company said core hospitals and hospitals acquired during the 2007 year had generated strong revenue and margin improvement.

Domestic pathology showed solid revenue and earnings growth despite market share losses in Western Australia.

Offshore pathology operations were performing well, especially in Malaysia and Singapore.

EBITDA from continuing operations in the hospitals division rose 14.4 per cent to $156.5 million, and EBITDA in pathology for 2008 was $51.2 million.

(AAP)

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