Residential aged care providers' Earnings Before Interest Tax and Depreciation (EBITDA) margin as of 31 March 2024 year to date (YTD), was 9.1%, according to the Department of Health and Aged Care's latest Quarterly Financial Snapshot (QFS) - Quarter 3 2023-24, meaning providers made $9.10 in EBITDA for every $100 of revenue received, which is an increase of 4.0 percentage points (or $4 for every $100 of revenue earned) on the 31 March 2023 YTD result.
The improved EBITDA margin was largely driven by increased AN-ACC funding and the additional $11.07 per resident per day hotelling supplement, said the QFS report.
The percentage of residential care providers reporting a positive EBITDA result increased to 80.2% as of 31 March 2024, up 11.7 percentage points from 31 March 2023 YTD.
However, with 64.4% of services currently not meeting both their total care minute and Registered Nurse targets, labour costs will continue to rise as providers move towards compliance with the staffing targets. With wages making up nearly three-quarters of total expenses, profitability will decline in the coming quarters, according to the snapshot.
The Department remains concerned that providers are using profits made from Government funding intended for care to make up shortfalls in accommodation.
"The department will continue to monitor this closely to ensure care funding is used to meet care requirements consistent with the expectation that care funding is spent on care," the QFS said.
RN agency costs and hours increased again, but Enrolled Nurses and Personal Care Workers agency costs and hours declined (see chart above).
In Q3 FY24, the average occupancy rate was 87.7% according to the Department of Health and Aged Care figures, an increase of 1.7 percentage points from the Q3 FY23 result.
Not For Profit regional providers were the only provider type to have a decrease in average occupancy from Q3 FY23 result, down 0.5 percentage points.
In the year to 31 March 2024, 12 residential aged care providers entered the sector, compared to 43 exiting.
You can read the report here.
