Estia Health confirms COVID-19 outbreak at Melbourne aged care facility

13 July 2020, Written by David Simmons

Estia Health confirms COVID-19 outbreak at Melbourne aged care facility

Aged care operator Estia Health (ASX: EHE) has confirmed 13 residents at its facility in Ardeer, Melbourne have tested positive for COVID-19.

The company says it is working closely with the Victorian Department of Health to manage and monitor the situation.

The outbreak makes up a fraction of the 177 new cases of COVID-19 confirmed in Victoria overnight.

The news comes as the company has announced a significant non-cash impairment of between $124 million and $148 million for FY20 due issues arising from the pandemic and historical acquisitions.

The company says the impairment charge is provisional in nature and will have no impact on the company's debt facilities, compliance with banking covenants or its ability to undertake capital management initiatives.

"As a result of ongoing uncertainty of future sector funding and financing, exacerbated by the issues arising from the COVID-19 pandemic, the company expects to report a non-cash impairment charge, primarily on goodwill arising from historical acquisitions," says Estia.

Under Estia's $330 million bank facility, net bank debt at 30 June 2020 was $99.4 million.

The news of the 13 confirmed cases in Estia's Ardeer facility came as a shock to the market; the company initially reported that there were no known cases of COVID-19 in any of its aged care facilities earlier this morning, but later in the day it updated the market with the announcement of the confirmed cases.

In its ASX announcement this morning Estia said testing and monitoring were key to the company's response to the COVID-19 pandemic currently sweeping through Melbourne.

"Strict protocols and testing remain in place at all homes and will do so for the foreseeable future, including testing of all new admissions," says Estia Health.

Part of the company's response included the reintroduction of visitor restrictions to its facilities on 29 June.

The 13 residents in Ardeer join two staff members at Estia Health who have who previously tested positive for COVID-19.

"Neither employee worked while showing symptoms of the illness," Estia Health said.

"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."

Shares in Estia Health are down 3.87 per cent to $1.44 per share at 13 July 2020.

Updated at 4:10pm AEST on 13 July 2020.

Author: David Simmons





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