5 Nov 2013

Acurity posts healthy profit

7:00 am on 5 November 2013

Private hospital operator Acurity Health says the outlook for the Wellington market is volatile because of government cutbacks but it is seeing some positive signs in Hawke's Bay, Tauranga and Auckland.

Acurity owns the Wakefield and Bowen hospitals in Wellington, the Royston hospital in Hastings, 60% of the Grace Hospital in Tauranga and a 30% stake in Endoscopy and Laparoscopy Auckland.

The company says its first-half net profit rose 70.5% to $4.1 million, at the top end of the company's guidance issued in mid-October.

That was largely because of increases in the value of its interest rate hedges but also because of a larger number of higher margin, more complex operations being performed at its hospitals.

Underlying earnings, excluding the impact of the interest rate hedges, were up 19.4%.

Chief executive Ian England says he's happy with the first-half result, even though overall volumes declined slightly, and the level of cover people held fell a little. But cases were becoming more complex, as the population aged.