Sonic Healthcare has reported a robust half-year performance, with revenue climbing 16.6% to A$5.45 billion and net profit rising 10.9%, underpinned by organic growth and key acquisitions. The company maintains its full-year guidance amid ongoing US business rationalisation.
- Revenue up 16.6% to A$5.45 billion
- Net profit after tax rises 10.9% to A$262 million
- Organic revenue growth of 5% supported by acquisitions
- EBITDA margin improvement reflects operational leverage
- Interim dividend increased 2.3% to 45 cents per share
Strong Half-Year Growth Driven by Organic Expansion and Acquisitions
Sonic Healthcare Limited has delivered a solid financial performance for the half year ended 31 December 2025, reporting a 16.6% increase in revenue to A$5.45 billion and a 10.9% rise in net profit after tax to A$262 million. This growth reflects a combination of organic expansion and strategic acquisitions, notably the European laboratory group LADR and US-based Cairo Diagnostics, which have bolstered Sonic’s global footprint.
Organic revenue growth of 5% was achieved despite challenges in the US market, where the company is undertaking a review and rationalisation of its anatomical pathology operations. Outside the US, Sonic’s laboratory services in Australia, Germany, and the UK showed particularly strong performance, with the UK benefiting from a new NHS outsource contract commenced in March 2025.
Operational Efficiencies and Margin Enhancement
The company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) increased by 9.7%, supported by operating leverage and synergy realisation across most business segments. Sonic reported a 30 basis point improvement in adjusted EBITDA margins, driven by tight cost control measures and procurement savings, including a major laboratory platform procurement in Australia.
Despite a 23% increase in net interest expense due to acquisition-related debt, Sonic’s credit metrics remain comfortably within covenant limits, with a gearing ratio of 29% and strong interest cover. Depreciation costs grew moderately at 4.6%, well below revenue growth, reflecting efficient asset utilisation.
Dividend Policy and Capital Management
Maintaining its progressive dividend policy, Sonic declared a 45 cent interim dividend, a 2.3% increase from the prior year, with 60% franked. The dividend reinvestment plan remains suspended for this payment. Capital management initiatives are ongoing, balancing growth investments with shareholder returns.
Currency Management and Future Outlook
Sonic continues to manage currency translation risk through natural hedging strategies, matching foreign currency assets with debt to mitigate volatility in reported Australian dollar earnings. The company reaffirmed its full-year EBITDA guidance of A$1.87 to A$1.95 billion on a constant currency basis, signalling confidence in achieving its financial targets despite ongoing US market adjustments and global economic uncertainties.
Looking ahead, Sonic’s focus remains on integrating recent acquisitions, optimising its US operations, and sustaining organic growth across its diversified geographic markets.
Bottom Line?
Sonic Healthcare’s disciplined growth and operational focus position it well for sustained performance, though US market rationalisation will be closely watched.
Questions in the middle?
- How will the ongoing US anatomical pathology rationalisation impact Sonic’s future earnings?
- What synergies and cost savings can be expected from the recent LADR and Cairo Diagnostics acquisitions?
- Will currency fluctuations continue to materially affect Sonic’s reported results despite natural hedging?