Medical Facilities (DR) Q2 2025 earnings summary

Executive summary

• Second quarter results were impacted by headwinds at Sioux Falls Specialty Hospital (SFSH), mainly due to the relocation of its primary physician group's clinic, which reduced complex surgical case volume and affected case and payer mix.

• Facility service revenue declined 1.3% to $80.6 million; excluding SFSH, revenue increased 6.5%.

• Surgical case volumes fell 0.9%; excluding SFSH, volumes were up 0.1%.

• Income from operations dropped 5% to just under $12 million; excluding SFSH, it rose 98.9%.

• EBITDA was $16 million, down 4.7% year-over-year.

Financial highlights

• Net income from continuing operations rose 375.1% year-over-year to $9.6 million for Q2 2025.

• Basic EPS was $0.24, up from $(0.11) in Q2 2024.

• Operating expenses before non-cash share-based compensation were $68.5 million, up 0.3% year-over-year.

• Distributable cash flow for Q2 was C$5.3 million, down 43.3% year-over-year.

• Quarterly cash dividend of C$0.09 per share, annualized yield of 2.28%.

Outlook and guidance

• Operations at SFSH are expected to normalize in the second half of the year, with the major impact from the clinic relocation now largely behind.

• Other hospitals are expected to maintain strong performance due to higher volumes and favorable payor mix.

• Recruitment at Arkansas Surgical Hospital is progressing, with a new pain doctor starting and a new spine surgeon joining in September 2025.