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Australia's Primary Health Profit Falls 24%

Australian medical centre operator Primary Health Care reported a 23.7 percent fall in first-half net profit, hit by the interest costs of buying a 20 percent stake in its takeover target Symbion Health.

Net profit fell to A$20.4 million (US$18.4 million) for the six months to December from A$26.8 million a year earlier. Profit before the income tax expense was A$26.65 million.

Analysts on average had expected a net profit of A$30.6 million, according to Reuters Estimates, but differed in their treatment of the costs associated with the Symbion holding.

Primary said its medical centre business was well positioned for further earnings and margin improvements. One further medical centre site is scheduled to open in the 2008 financial year with a further five sites in various stages of negotiations.

The company has been vying with private hospital operator Healthscope for control of Symbion's medical testing business, in a long-running battle for assets in an Australian healthcare sector set for rapid growth as the population ages and use of private health insurance increases.

Primary declared its A$2.7 billion offer for Symbion final last week and said if it secured a 50.1 percent interest in Symbion by Feb. 12, it would make the bid unconditional.

Primary said as of Feb. 8 it had a 49.7 interest in Symbion, 25.35 percent of which was held in an institutional acceptance facility, from which the original owners may withdraw their shares.

Symbion said last week it might consider reversing its rejection of the A$4.10 a share offer if Primary won majority ownership.