Estia Health Ltd (ASX: EHE) shares could fall this morning after the aged care home operator told investors occupancy rates fell to 93.5% as at November 30 2019. The result is lower than the rate 94.1% rate posted in August 2019 as the industry continues to struggle with poor publicity and public sentiment turning sour on the sector. The group warned it doesn't expect the situation to improve in the short term as the shadow of the Royal Commission into Aged Care Quality looms over the sector.
It also warned that revenues were not rising as fast as expected, with average daily revenue rates over FY 2020 just 1.5% above those in FY 2019. It blamed this result on competitive pressures and a reduction in the regulator's Maximum Permissible Interest Rate (MPIR).
Estia now expects FY 2020 EBITDA on 'Mature Homes' to come in between $78 million to $82 million. As at the end of FY 2019 it had net bank debt of $110.3 million.
