The Ramsay Health Care Limited (ASX: RHC) share price is ending the week on a high.
In afternoon trade, the private hospital operator's shares are beating the ASX 200 index with a 5% gain to $62.02.
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Why is the Ramsay share price beating the ASX 200?
Investors have been bidding the Ramsay share price higher on Friday following the release of the company's first quarter update.
According to the release, activity levels improved across all regions over the quarter compared to the prior corresponding period. Management advised that this reflects the decline in COVID cases in the community.
In light of this, the COVID impact on its profits in Australia and the UK fell from $44 million in July to just $5.9 million in September. The total impact across the quarter in these markets is estimated to have been $64.4 million.
Ramsay also revealed that it has been fighting rising costs. It advised that it is focused on negotiating improved terms with payors to reflect higher staffing costs related to labour shortages and inflationary pressures. Management notes that it finalised satisfactory new agreements with a number of private payors over the quarter.
This ultimately led to Ramsay reporting a 6.7% increase in revenue to $3,445.4 million and a 2.3% decline in EBITDA to $410.6 million for the first quarter.
Outlook
Pleasingly, this momentum has carried over into October, with Ramsay starting the second quarter positively. Looking ahead, management appears optimistic that it is onwards and upwards from here.
It commented:
The outlook for the Group remains strong as the business is well placed to take advantage of the positive long-term dynamics driving the healthcare industry. Ramsay expects a gradual recovery through FY23 and more normalised conditions from FY24.
The Ramsay share price remains down 13.5% in 2022 despite today's decline.
