The listed provider has revealed 13 residents at its Ardeer home in Victoria, 15km west of the Melbourne CBD, have tested positive for coronavirus following an earlier announcement that two staff members had been diagnosed as the company entered a trading halt amid a huge write down of between $124 million and $148 million.
Estia had told the market that two staff working across three of its homes had tested positive to COVID-19, but “neither employee worked while showing symptoms of the illness”.
“All infection control precautions were put in place immediately upon notification and we are working with the Victorian Health Public Health Unit and the Commonwealth Department of Health to monitor this situation,” it said in a statement early yesterday.
But by lunchtime, the provider had been forced to issue an update that 13 residents have also tested positive.
The cases come despite Estia being the first major provider to put visitor restrictions back in place at its 19 Melbourne homes on 29 June – two weeks ago – as the number of community outbreaks increased.
The news distracted from the major announcement in the first update – that Estia expects a non-cash impairment charge of between $124 million and $148 million, mainly on goodwill from historical acquisitions in its full-year results, blaming the “ongoing uncertainty of future sector funding and financing, exacerbated by the issues arising from the COVID-19 pandemic”.
Despite this uncertainly, the company said its occupancy is now sitting at 92.7% as of 30 June 2020, a gradual improvement since May 2020, but still down from its full 12-month occupancy figure of 93.2%.
Its new homes at Southport and Maroochydore recorded occupancy rates of 100% and 70.6% respectively.
Estia said the Government’s one-off payment to assist providers with the costs of the pandemic ($900 per resident for metropolitan homes and $1,350 per resident for regional homes) has also boosted its funding by $5.8 million.
The provider also maintained its resident bond liability remained intact.
“The total RAD/bond 2020, of which $99.9m was represented by probate liabilities. During the second half of the financial year net inflows from the two homes at Southport and Maroochydore in ramp up were $14 million, net outflows from mature homes were $2.9 million and probate decreased by $3.5 million from December 31 2019.”
Estia is not the first listed provider to face a write down this year.
As we reported here, Japara already warned the market last month that it expected a $270 to $300 million hit to its goodwill in its full-year results because of the pandemic.
However, the announcement is yet another sign that the financial pressures facing the sector extend all the way up.
Estia Health is one of Australia’s largest aged care providers with 69 homes, 6,180 beds and more than 7,500 employees across Victoria, South Australia, New South Wales and Queensland.