Abano earnings cut by natural disasters

Wednesday 30th March 2011

Abano Healthcare is expecting full year earnings to be $300,000 to $400,000 lower due to the January floods in Queensland, Victoria and New South Wales, and the February earthquake in Christchurch.

For the year to May 31, before a gain on sale of Abano's shareholding in audiology company National Health Care, revenue was expected to be $175 million and $177 million.

Operating ebitda (earnings before interest, tax, depreciation and amortisation) was expected to be between $17 million and $18 million, and operating npat (net profit) between $2.1 million to $2.6 million, Abano said today.

A one off gain of $12.3 million would result from the sale of the National Hearing Care shareholding.

Excluding international accounting rule changes and the gain on sale, underlying ebitda was expected to be $18 million to $19 million and underlying npat from $3.3 million to $3.8 million.

The 2011 dividend would be maintained at 21c per share.

In the previous financial year, Abano reported operating npat of $4.4 million on revenue of $178.1 million, with ebitda of $20.2 million.

Abano chairwoman Alison Paterson said there had been no material physical impact on any of its business premises as a result of the floods and earthquake, but many staff had lost homes or been affected by the death or injury of close friends and family.

The unplanned impacts of the natural disasters were among one-off planned and unplanned costs that would have to be absorbed in the last quarter of the financial year, she said.

The brain injury rehabilitation business had a softer than expected performance as it continued to face referral challenges.

Also some dental acquisitions were likely to settle later than planned in the next three months, meaning the money would be spent without full benefit this financial year.

There were also relocation costs from the previously announced relocation of the Bay Audiology head offices in Australia and Asia.

Managing director Alan Clarke said that despite an unsettled business environment, strong growth continued from Abano's two dental businesses, helped by new contracts in orthotics and pathology, which would generate medium term annuity income streams.

NZPA

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