The aged care sector made a net loss of $1.7 billion in 2022-23, or a loss of $25.31 per resident per day, an improvement on the net loss of $2.3 billion recorded in 2021-22, according to the Australian Government's Financial Report on the Australian Aged Care Sector 2022-23.
However, of the $1.7 billion overall net loss, $766 million (or $11.16 per resident per day) can be attributed to bed licence amortisation (aged care providers have been amortising the value of their bed licences since Aged Care Approval Rounds (ACAR) ended in 2020).
Average EBITDA, which excludes interest, tax, and depreciation and amortisation charges, increased from a loss of $46 per resident per year in 2021-22 to a profit of $2,764 in 2022-23 - halting five years of declines, but still lower that the $3,771 EBITDA achieved in 2020-21 (see graph below). The improvement was attributed to the introduction of AN-ACC from 1 October 2022.
The EBITDA margin increased from 0.0% in 2021-22 to 2.1% in 2022-23.
Care profit up
In 2022-23, the average net operating care result per resident per day was $28.10, an increase of $8.90 per resident per day from 2021-22.
However, providers continued to make a loss on accommodation and administration, contributing to an overall net operating loss of $15.65 per resident per day, and after non-recurrent items (such as amortisation of bed licences) an overall net loss of $25.31.
Total Government funding in 2022-23 was $233.80 per resident per day, up 7.3% from $217.88 in 2021-22.
Total resident funding in 2022-23 was $89.39 per resident per day, up 10.0% from $81.24 in 2021-22.
The proportion of profitable providers was 43% in 2022-23, up from 31% in 2021-22.
RADs up 7%
The total Refundable Accommodation Deposits (RAD/RACs) held in the sector increased by $2.6 billion, or 7%, to $38.1 billion.
This increase impacted the net worth/equity of the aged care sector. The net worth of the sector was $5.9 billion in 2022-23, down from $8.3 billion in 2021-22, primarily due to the $2.6 billion increase in RADs.
The average value of RADs held by providers increased from $350,000 in 2021-22 to $366,000 in 2022-23.
The overall average agreed RAD price for the sector was $438,000 and the overall average published price for the sector was $488,000, around $50,000 more - showing providers are "consistently" charging less for their rooms than their advertised accommodation prices.
Other highlights from the report:
- In 2022-23, the average total length of stay of those living in residential care was 3.0 years, down from a peak of 3.1 years in 2021-22.
- Single aged care facility providers represented 62% of providers and accounted for 18% of all operational residential care places in 2022-23.
- The Government has lowered its 20-year projected demand for home care from about 2 million (last year's projection) to just over 1.7 million.
Read the report here.
