Japara expects $270m-$300m hit to goodwill

Japara Healthcare expects to declare a non-cash impairment charge of $270 million to $300 million, mostly against goodwill, in its full-year financial results as a result of the coronavirus crisis.

The aged care operator says the impairment will have no impact on its debt facilities or covenants, cash flows or normalised earnings.

It says none of its 4,060 residents have tested positive for COVID-19, although one staff member did in April.

That employee was isolated and has since recovered, the company says.

Japara says it has three development projects underway and is pausing all other construction projects in light of the uncertain economic outlook.

“Operational conditions in the aged care sector continue to be challenging with a moderate weakening in occupancy experienced from Easter onwards as a result of a reduction in demand, particularly from the hospital sector,” the company said on Wednesday.

At 1204 AEDT, Japara shares were up 6.3 per cent to 59 cents.

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