Healthscope reports lower NZ earnings

AUCKLAND: Healthscope’s New Zealand pathology business gave up earnings growth as it shared operating efficiencies with district health boards through the recontracting process.

The New Zealand lab testing division reported a 1% decline in revenue to $A240.2 million($NZ265.4 million) in the year ended June 30 and a 2.7% dip in operating earnings before interest, tax depreciation and amortisation to $A58.1 million. In New Zealand dollar terms, revenue rose 1.6% and earnings 2.5%, slowing from the unit’s outperformance in 2017.

‘‘Revenue growth has moderated by the sharing of operational efficiencies with district health boards through recontracting, combined with no new DHB contract work,’’ the company said in its annual report.

‘‘The priority for Healthscope in New Zealand is maintaining strong relationships with the DHBs by delivering highquality services and superior operational efficiencies.’’

The pathology business is willing to share ‘‘some of the longterm’’ gains with the DHBs to ‘‘strengthen existing relationships’’.

Healthscope operates under the Labtests, Southern Community Laboratories, and Northland Pathology brands in New Zealand, and offers veterinary services via Gribbles Veterinary.

Healthscope said the Gribbles Vet unit posted a ‘‘good performance’’ for revenue and margins ‘‘on the back of expanded services nationwide’’.

Group profit fell 19% to $A89.4 million due to the cost of hospital closures and onerous lease provisions, while revenue increased 3.7% to $A2.34 billion.

The Melbournebased company completed a strategic review of its $A1 billion Australian hospital portfolio and plans to set up an unlisted property trust to house those assets, leasing them back to Healthscope.

The ASXlisted shares slipped 0.2% to $A2.165. — BusinessDesk