By David Winning

SYDNEY--Ramsay Health Care tumbled to a half-year loss on impairment charges and said it is exploring options for its majority stake in European private hospital business Ramsay Santé.

Ramsay reported a net loss of 104.9 million Australian dollars (US$66.6 million) for the six months through December, reversing a A$758.5 million profit a year ago when it benefited from the gain on sale of its Asia-focused joint venture with Malaysia's Sime Darby. Its latest half-year result was dragged down by A$263.8 million of one-off items, including an impairment in the U.K. where its Elysium mental health services business has struggled since its acquisition in January 2022.

Ramsay's underlying profit, which strips out one-off items, rose by 14% to A$158.9 million when currency swings are stripped out. Revenue increased by 6% to A$8.54 billion. Directors of the private hospital operator declared an interim dividend of 40 Australian cents a share, in line with the payout of a year ago.

Ramsay said it has hired Goldman Sachs to explore and advise on options for its 52.8% shareholding in Ramsay Santé as it focuses on its hospital businesses in Australia and the U.K.

"There are multiple factors that may influence timing and outcomes of this process," Ramsay said. "All strategic options need to take into account Ramsay Santé's shareholding structure and French listing rules as Ramsay Santé is listed on the Euronext stock exchange."

Chief Executive Natalie Davis, who succeeded Craig McNally last year, is moving quickly to overhaul Ramsay's strategy after the business struggled in the aftermath of the Covid-19 pandemic. Ramsay said Elysium and Ramsay Santé generate low returns on capital, with limited cost benefits when married to the rest of its global operations.

Ramsay earlier this month said it has paused investment in adding new sites for Elysium as it concentrates on improving performance. Occupancy at Elysium's clinics hasn't improved as quickly as hoped, adding to headwinds that include a shortfall in funding relative to the business's operating costs.

The challenges faced by Elysium are in contrast to Ramsay's hospital business in the U.K., which have benefited from a rosier outlook for tariffs and higher activity as efforts are made to bring down waiting lists for treatment.

On Thursday, Ramsay said its underlying earnings before interest and tax--or Ebit--from treating patients in the U.K. rose by 29% at constant exchange rates in its first half. Elysium's Ebit fell by 42% while it was down by 22% at Ramsay Santé. Australia remains Ramsay's main profit generator with Ebit of A$309 million in the period.

Ramsay it expects activity growth in all regions during the 12 months through June, albeit at a lower rate than in the 2024 fiscal year. The company also signaled a dividend payout ratio of 60-70% of annual net profit before accounting for any one-off items.

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

(END) Dow Jones Newswires

February 26, 2025 16:41 ET (21:41 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.