Estia Health has revealed to the market how COVID-19 is hurting aged care providers across the board.
In reporting a Net Loss After Tax of $52.4 million for the 12 months to 30 June 2022, the Sydney-based company said the financial result was impacted by a full-year bed licence amortisation charge of $60.3 million before tax and COVID-19 related costs of $42.3 million, net of associated grant recoveries, which it had warned about earlier this month.
It also revealed its average bed occupancy for the financial year is 91.6% (FY21: 91.2%), adding there were signs of recovery with an occupancy rate of 92% at 19 August.
“The past 12 months have continued to reflect extremely challenging operating circumstances for the sector as the pandemic moved into its third year, and Omicron heavily impacted the sector from December. This impact has largely dominated the landscape and further exacerbated the challenges of financial sustainability within this sector,” Estia Health CEO Sean Bilton (pictured) said.
Sean said Estia Health was in a strong position.
“There remains core strength in the company's balance sheet. EBITDA on Mature Homes fell to $37.5 million in the year, almost exclusively due to the estimated incremental COVID-19 prevention and response costs of $50.4 million, approximately twice the level seen in FY 21.
“Although government grant schemes exist to provide for the recovery of the significant portion of these costs, as we advised the market in May and again earlier this month, a significant delay in the processing of these claims by government has resulted in only $7.1 million of these claims being confirmed by the end of FY 22.
“Had these costs been recovered in full during the period in which they were incurred, EBITDA on our Mature Homes would have been approximately $80 million.”
Sean went on to say occupancy levels had been hit heavily by COVID.
“The decline in average occupancy in the second half also impacted our net RAD flows, which were $22.8 million for the year. Pleasingly, our average incoming RADs continued to improve to $453,000.
“The on-market share buyback announced in November was conducted in line with ASX rules, and we were able to purchase 3.6 million shares for consideration of $8 million in the period, primarily due to ongoing low liquidity and volumes,” he said.
Due to the NPATA loss, Estia is not paying a final dividend, meaning the interim dividend of $0.0235 will be the full dividend for the year.
“Not withstanding the financial performance reflecting COVID-19 and a delay in grand recovery, our balance sheet remains in a healthy position with the net debt at the 30th of June of $79.6 million with significant undrawn capacity in our $330 million sustainability-linked debt facility.
“While the reported financial performance is clearly disappointing, the underlying results are found considering the challenges that faced the sector during the period,” said Sean.
