By David Winning


SYDNEY--Sonic Healthcare said its net profit fell by 47% on a steep drop in Covid-19 testing volumes, but it has benefited from recent acquisitions while growth in its base pathology business has picked up.

Sonic reported a net profit of 202.3 million Australian dollars (US$132.1 million) for the six months through December, compared to A$382.4 million a year ago. Its earnings before interest, tax, depreciation and amortization--or Ebitda--declined by 20% to A$736.7 million on a statutory basis.

Directors of the company declared an interim dividend of 43 cents a share, up from a payout of 42 cents a year earlier. That puts Sonic on track to extend a record of at least maintaining its annual dividend in the 30 years it has made payouts to shareholders.

Sonic's bottom line shows how some healthcare companies continue to feel after-effects of the Covid-19 pandemic. Health officials relied on Sonic's laboratories to carry out PCR tests when the virus began spreading and governments sought to track transmission within local communities. But countries' later pivot to treat the virus as endemic led Sonic's Covid-19 revenue windfall largely to dry up.

On Tuesday, Sonic said its revenue rose by 5.5% to A$4.31 billion during its most recent half, but the result was constrained by a 90% drop in sales of pandemic-related services to A$37.4 million at constant exchange rates.

As a result, investors are increasingly focused on its underlying performance and its base pathology business. Sonic said revenue from its base business, which excludes services related to Covid-19, rose by 10% compared to a year earlier after stripping out the impact of currency swings.

The company said it was on track to achieve annual guidance, albeit more likely toward the lower end of a forecast range for Ebitda of A$1.7 billion-A$1.8 billion in the 12 months through December.

Sonic's recent deals include the US$130 million acquisition of Utah-based Pathology Watch in November, which is partly a bet on digital pathology services. Chief Executive Colin Goldschmidt has talked of the potential for artificial intelligence to enhance efficiencies in anatomical pathology.


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


(END) Dow Jones Newswires

02-19-24 1710ET