By David Winning

SYDNEY--Sonic Healthcare reported a 17% rise in first-half net profit rose on stronger demand for pathology and imaging services in key markets, but kept its annual guidance unchanged.

Sonic said its net profit totaled 236.7 million Australian dollars (US$150.4 million) in the six months through December, up from A$202.3 million a year ago. Its earnings before interest, tax, depreciation and amortization--or Ebitda--increased by 13% to A$829.4 million when currency swings are stripped out.

Directors of the company declared an interim dividend of 44 cents a share, up from a payout of 43 cents a year earlier. That puts Sonic on track to extend a record of at least maintaining its annual dividend in the three decades it has made payouts to shareholders.

Sonic has been focusing on its base business since revenues from services provided during the Covid-19 pandemic began to slow sharply. That strategy has involved growing its footprint in overseas markets, with a 423 million euros deal, equivalent to US$440.9 million, for Germany's LADR Group announced in December. Sonic this month said the acquisition had been cleared by regulators and is likely to settle on July 1.

On Thursday, Sonic said its revenue rose by 8.4% to A$4.67 billion during its most recent half. It kept guidance for annual Ebitda unchanged at between A$1.70 billion and A$1.75 billion despite the recent delay to a reduction in U.S. Medicare fees that management had previously assessed as a A$15 million hit.

Like other healthcare providers, Sonic has experienced rising labor costs that have eaten into profits. The company is also facing funding cuts and regulatory uncertainty in some markets where it operates. Sonic said its U.S. business grew by 2% before accounting for acquisitions, although anatomical pathology revenues were weaker than expected there.

Sonic said its Ebitda margin improved by 60 basis points in its most recent half, and by 90 basis points when the impact of the recent acquisitions of Dr Risch Group and PathologyWatch are stripped out.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

February 19, 2025 17:09 ET (22:09 GMT)

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