The latest annual reports from three major pathology firms—that provided large-scale PCR testing during the pandemic—reveal bumper profits from the COVID-19 years.
Global pathology provider, Sonic Healthcare reeled in a record $1.46 billion (US$950 million) net profit—an 11 percent increase on the previous year—while its revenue was also up seven percent to $9.3 billion.
The company is the largest medical laboratory and pathology service provider in Australasia, Europe, and the third-largest in the United States.
“Sonic’s balance sheet is very strong, after two years of exceptional profit and cash flow generation,” said Chairman Mark Compton in the company’s annual report.
“Twelve months ago, we would never have expected our COVID-related revenues to grow by 13 percent in 2022. It remains difficult to predict future revenues from COVID-19 testing; however, we do expect ongoing demand, coupled with seasonally weighted increased testing for other respiratory viruses too.”
In Australia, Sonic operates brands such as Sullivan Nicolaides, Douglass Hanly, and Melbourne Pathology. The group was a major provider of PCR testing services, which became mandatory for individuals wishing to work or travel, especially before rapid antigen tests results were widely recognised.
Meanwhile, Healius Pathology, which operates 2,000 patient collection centres across Australia, including brands QML, Laverty, Dorevitch, and Western Diagnostic Pathology, also recorded a bumper year.
“We are sure most readers have had enough of COVID-19, but we must thank our teams for their extraordinary response during the challenges of the Delta and Omicron outbreaks. During the year, our pathology teams performed a daily record of 65,000 COVID-19 PCR tests, an incredible achievement,” said Chair Robert Hubbard and CEO Malcolm Parmenter in the company’s annual report (pdf).
The company estimates conducting around 13 million COVID-19 tests to date.
Healius managed to double its net profit to $309.3 million from the previous year’s performance of $148.4 million. While it also recorded a 30 percent increase on its revenue from $1.45 billion to $1.89 billion as of June 2022.
The company’s annual report also said that PCR testing had steadily dropped since February to around 10,000 to 12,000 tests per day, especially with Omicron becoming endemic.
Healius also noted that pathology testing related to non-COVID-related conditions had dropped due to the impact of “state-based lockdowns, elective surgery restrictions, and isolation requirements” and that going forward, with the ageing population, the number of testing carried out in these areas could climb.
The company’s assessment comes as the Australian Bureau of Statistics recorded an uptick in deaths from conditions such as cancer, dementia, and diabetes in 2022, which some medical practitioners warn may have been due to patients simply not seeing their doctor on a more regular basis during the COVID-19 years.
Meanwhile, Australian Clinical Labs, which runs 1,336 collection centres across the country, recorded a major 101 percent increase in its profit after tax, jumping from $60.4 million to $178.2 million by June 2022—this is off a 48 percent increase in revenue from $647 million to $996 million.
“The COVID-19 pandemic effectively stopped growth in non-COVID testing revenue,” according to the company’s annual report (pdf).
“This has been due to lockdowns, doctor access issues, decreased levels of testing for non-COVID services (e.g. flu) and social factors (reluctance to visit medical practitioners). As the impact of the pandemic decreases, there should be a rebound in non-COVID testing revenue as underlying drivers still apply.”