Ramsay Health Care recorded a bottom-line net profit $160.7 million in the six months to December, swinging from a loss of $104.9 million a year earlier, despite weak-to-flat earnings in its UK and European hospitals.
Ramsay operates more than 70 hospitals in Australia and manages more than 500 facilities worldwide.
However, private hospitals were not receiving their fair share of annually indexed health insurance premiums, threatening their viability, group CEO Natalie Davis said.
"The premium increases that have been approved for private health insurers over the last five years since COVID have not fully been passed through to private hospitals, and our benefit payout ratio has decreased over time," Ms Davis told an earnings briefing.
"The hospital sector is experiencing very genuine cost pressures, and so that is the discussion that we have with our private health insurer partners."
Private health premiums will increase by an average of 4.41 per cent on April 1, after being approved by Health Minister Mark Bulter, following increases of 3.73 per cent in 2025 and 3.03 per cent in 2024.
Ramsay's underlying net profit after tax grew 8.1 per cent to $171.1 million, supported by outperformance in its more than 70 hospitals.
Australia was the key driver of the result with underlying operating earnings growth of 7.1 per cent, supported by activity growth, higher patient acuity, improved private health insurance indexation and cost management.
"Ramsay's positive momentum has continued in the first half of FY26 with revenue, EBIT and NPAT growth as we execute on our three core priorities to improve performance and returns to shareholders," Ms Davis told an earnings briefing.
Earnings from its UK hospitals were flat, while its Ramsay Sante business, which operates facilities in continental and northern Europe, grew operating earnings 4.4 per cent on the equivalent half to $116.7 million.
Ramsay plans to demerge Sante and distribute its 52.8 per cent stake in the business to shareholders later in 2026.
The board declared a fully franked dividend of 42.5 cents per share, up 6.3 per cent and representing a 60 per cent payout ratio of underlying earnings.
The results beat consensus expectations, RBC Capital Markets analyst Craig Wong-Pan said.
"While the earnings in the France business disappointed, we expect investors will view this as supportive of the board's decision to proceed with an in-specie distribution of Ramsay Sante," Mr Wong-Pan said.
"There have been minor changes to the company's qualitative outlook commentary with management now saying Australian EBIT growth momentum should continue."
Investors appeared to like the result, sending Ramsay shares almost 10 per cent higher to $41.94.
Enterprise bargaining agreements with Victorian nurses were ongoing, and followed a recently agreed 28 per cent increase over four years for public hospital nurses in the state.
Ms Davis offered little detail on the talks, but said Ramsay needed to be competitive to attract the required workforce in each jurisdiction.
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