Omicron hits Estia occupancy, down 1.7% over past month

ASX-listed provider Estia Health has suffered a significant drop in occupancy over the past month as Omicron continues to bite. In a trading update, Estia revealed that total group occupancy as at 27 January was 90%, down from 91.7% on 31 December 2021; the biggest fall of 2.1 percentage points happened in NSW and Victoria, from 87.7% to 85.6%, while the rest of the group saw a 1.1 percentage point decline from 96.8% to 95.7%. Average group occupancy across the first half of FY22 was 92.6%. According to Estia, the rapid national spread of the Omicron variant of COVID-19 has affected occupancy and led to higher costs.

“While direct incremental costs associated with the management of COVID-19 outbreaks at homes continue to be eligible for recovery under extended Federal Government grant schemes, the Group also incurs COVID-19 related costs across its homes, including those without outbreaks. These latter costs are not presently recoverable under Federal Government grant schemes. “Overall, the COVID-19 situation remains volatile and unpredictable and the potential financial impact of future outbreaks in the community on Estia Health’s earnings in the short-term therefore remains uncertain,” the provider said.

The listed provider has previously told the market in its 2019 half yearly update that a 1% difference in occupancy was equal to $5 million EBITDA – suggesting that this latest drop has come at a cost of $8.5 million. Estia achieved 94% occupancy in FY21, but made only $1 million in profit.