Laboratory giant Sonic Healthcare has blamed the federal government's Medicare rebate freeze for slow growth in its Australian medical centres, while the company's overseas units have been star performers.
Sonic's revenue in the first-half of 2016-17 from its local medical centres was $205 million, a 6.2 per cent increase on the same period last year.
However, chief executive Colin Goldschmidt said, the federal government's freeze on Medicare rebates had stifled growth.
"Our Australian earnings are somewhat muted as we move through some regulatory issues with the Australian government and funding," Dr Goldschmidt said.
In its last budget, the federal government extended a freeze on the indexation of Medicare rebates to 2020.
Labor froze indexation during 2013, then lifted it briefly in 2014-15.
The freeze means that GPs and other medical specialists will be reimbursed the same amount for delivering health services three years from now as they were in 2014.
On the international front, Dr Goldschmidt said recent laboratory acquisitions in Germany and the US would significantly bolster earnings in 2018 and future years.
He said Sonic's German and Swiss operations posted standout results, achieving six per cent and eight per cent growth in revenues respectively, when adjusted for exchange rates.
Sonic's largest US business, Texas-based CPL, also continues to grow strongly, he said.
Dr Goldschmidt said the company has further partnerships planned in the lucrative US hospital laboratory market, following a joint ventures with Western Connecticut Health Network and Baptist Memorial Healthcare, headquartered in Memphis. Both ventures are due to start in April 2017.
"The hospital lab market is a bigger market than the market we are currently in and so we see very significant growth opportunities in the hospital lab market in the USA," he said.
Sonic will also look to further expand its Californian operations on the back of the acquisition of West Pacific Medical Laboratory, in addition to two other labs close-by.
Sonic lifted first-half net profit 4.7 per cent to $196.7 million in the six months to December 31.
Total revenue was up 0.9 per cent at $2.5 billion, a quarter of it coming from Sonic's Australian medical centres and laboratories.
SONIC EYES MORE GROWTH IN THE US
* First half net profit rose 4.7pct to $196.7m
* Revenue up 0.9 per cent to $2.5b
* Dividend up one cent to 31 cents per share, partly franked.
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