Oceania Healthcare (ASX:OCA), a leading provider of aged care and retirement living services in New Zealand, operating 46 sites across the country, has announced its half-year financial results for the six months ending 30 September 2024.
The company reported a net loss of $17.1m, a stark contrast with a $35.2m profit in the same period last year. A significant portion of the losses was due to an impairment in property, plant, and equipment related to the Elmwood care site in Auckland. This impairment arose from the partial closure of buildings and the relocation of residents to newly completed care suites
Underlying EBITDA, which excludes one-off items and unrealised fair value adjustments, increased by 2.7% to $38.6m, driven by higher sales volumes and a 34.9% rise in capital gains to $38.2m. Revenue from continuing operations was $132.6m, up 0.8%, while operating cash flow grew 23.1% to $70.4m. Basic earnings per share fell to -2.4 cents, reflecting the company’s losses during the period.
The company continued its strategy of modernising its portfolio, delivering 106 new care suites at the Elmwood site in Auckland and divesting four non-core sites for $25.1m. Total assets increased to $2.82bn, and unsold stock decreased by 13.5% to $305m. The debt gearing ratio improved slightly to 37.5%, reflecting Oceania’s focus on reducing leverage. Resales of independent living units and care suites remained strong, with 169 units sold, and new care suite sales exceeded expectations with 51 units sold.
CEO Suzanne Dvorak, who joined the company in July 2024, highlighted the need to improve sales, enhance the profitability of care services, and streamline development plans. The appointment of a Chief Sales and Marketing Officer underscores Oceania’s focus on addressing unsold stock and boosting revenue. The Board has paused dividends, citing the need to reduce gearing and improve financial flexibility before resuming payments.
On Friday, shares closed 9.68% lower at 70 cents.