In This Article:
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Underlying Earnings: Improved driven by ora receipts.
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EBITDA: Increased by 2.6% compared to the prior period.
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Occupancy Rate: Total group occupancy at 90-92%; unaffected sites at 94%.
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Net Cash Inflow: $97 million from operating activities.
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Net Debt Reduction: Reduced by approximately $8 million since March.
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Gearing Level: Reduced to 37.5%.
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Interest Coverage Ratio (ICR): 4.2 times, compared to a covenant of 2 times.
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Blended Interest Rate: 2.7% for retail bonds; 5.7% for bank debt.
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Development and Resale Margins: Resale margin over 20%; development margins elevated.
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Care Segment EBITDA per Bed: $10,000 per bed.
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Annualized EBITDA per Bed Including Resale Gains: Just over $20,000 per bed.
Release Date: November 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Oceania Healthcare Ltd (ASX:OCA) has completed or is nearing completion of its brownfield developments, which positions the company to focus on selling its high levels of unsold stock.
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The company has improved its underlying earnings and cash flow, driven by strong capital gains and occupancy rates.
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Oceania Healthcare Ltd has met all banking covenants and requirements, indicating strong capital management.
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The company has achieved a significant milestone with 94% occupancy at sites not affected by development, which is expected to improve margins.
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Oceania Healthcare Ltd is focusing on sustainability, with initiatives like building to Homestar Seven standards and being a finalist in the Deloitte 200 Awards for sustainability leadership.
Negative Points
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Oceania Healthcare Ltd is facing high levels of unsold stock, which is a primary focus for the company to address.
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The company's gearing levels are too high, which is a concern that needs to be managed alongside sales efforts.
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There have been increases in finance costs and operating expenses, impacting the company's financial performance.
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The company has experienced impairments related to its Elmwood site, affecting its financial results.
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Oceania Healthcare Ltd's development debt coverage has been decreasing, partly due to capitalized interest, which adds financial pressure.
Q & A Highlights
Q: Can you provide more details on the changes in unit pricing and the role of Marketability in your sales strategy? A: Suzanne Dvorak, CEO, explained that a full portfolio review of prices across all sites was conducted, affecting both care and independent living units. Prices may increase, stay the same, or decrease based on demand. Marketability's role is to maintain sales momentum, especially at high-value sites, and they are compensated on a success basis rather than a retainer.