Sonic Healthcare is closing low-performing collection centres and laying off staff, aimed at improving its laboratory and imaging operations following government fee cuts.
Chief executive Colin Goldschmidt said the company is also renegotiating some of its rental agreements in a bid to cut costs.
"It's a dual effect of closing centres and renegotiating rent and reducing labour costs in those centres as well, all feeding to the bottom line," Dr Goldschmidt said on the group's earnings conference call.
Sonic didn't specify how many of its collection centres would be closed or the number of staff that will lose their jobs.
Sonic said its Australian operations have been "adversely impacted by government polices".
The group's Australian Laboratory business was hurt by government fee cuts in November 2014 and specimen collection infrastructure costs in Australia.
"The fee cuts have now cycled and a project to close low-performing collection centres is in progress," Sonic said in its earnings results statement.
Another round of fee cuts have been proposed by the federal government, which Sonic and the pathology industry plan to fight.
An aggressive campaign against the proposed fee cuts, aimed at up to two million patients each month, is about to be launched, Dr Goldschmidt said.
Earnings before interest, tax, depreciation and amortisation fell in the Australian Laboratory and Imaging businesses in the first half ended December 31 from a year ago.
But the pain at home was largely offset by Sonic's strong performance in the US, the UK and Europe.
Net profit rose eight per cent to $187.9 million for the six months ended December 31, thanks to strong performances abroad, particularly in the US.
That compares with a net profit of $174 million for the same period last year.
"The benefits of Sonic Healthcare's global footprint are very evident in the half-year results, with our international operations performing strongly whilst our Australian operations have been impacted by government policies," Dr Goldschmidt said.
Sonic's overall results were well received by investors, with the stock up 40 cents at $18.53 in a broadly flat Australian market at 1156 AEDT.
Sonic reiterated that it expects a 25 per cent rise in annual EBITDA of between $870 million to $900 million.
INTERNATIONAL OPERATIONS BOOST SONIC PROFIT
* First half net profit rose 8pct to $187.9m vs $174m
* Revenue up 22pct to $2.45b
* Dividend rose by one cent to 30 cents a share
