Wellington-based private hospital firm Acurity's interim profit fell by a quarter due to a decline in operating earnings.
The group, previously known as Wakefield Health, owns two hospitals in Wellington and one in the Hawkes Bay. It has investments in private healthcare establishments at Auckland and Tauranga.
It reported a profit after tax of $2.38 million for the six months to September 30, down from $3.18m in the same period last year.
Chairman Alan Isaac said it was disappointing the ‘‘earnings momentum’’ was not maintained.
‘‘Market conditions have been patchy and volumes have suffered as a result. The costs associated with the significant investment in upgrading Bowen Hospital, being increased depreciation and interest cost, have also weighed on short term results,’’ Isaac said.
The redeveloped Bowen Hospital, at Wellington’s Crofton Downs, was completed in October. Work involved expanding its radiology and endoscopy facilities and specialist consulting rooms.
"However, this is an investment that we believe will add considerable value over the long term and we were very pleased to complete this substantial project on time and within budget in the current financial year.’’
Revenue was down 1.4 per cent to $40.58m, with volumes down although there was high demand for ACC funded surgery that outstripped allocated funding. There was more District Health Board outsourcing work than the same time last year.
Its expenses for specialists on contract rose 19 per cent to $5.03m and employee costs were up 1 per cent to $13.2m. The costs of its medical supplies were down 3 per cent to $9.76m.
Isaac said work flows were volatile from one month to the next. A slight decline in the number of New Zealanders with private health insurance contributed to lighter demand for private hospital care.
‘‘While the short term outlook is for subdued volumes, there are increasing indications of unmet demand in light of the limitations on the state’s ability to commit increased funding to healthcare. Coupled with the aging of the population, this continues to point to increased opportunities for the private sector in the medium term.’’
Reported earnings per share plummeted 36.4 per cent to 14c. Investors will receive a dividend 1c a share less than the same time last year, at 6c a share to be paid 7 December. At the time of writing its shares were unchanged at $5.90 each.