Ramsay Health Care recorded a bottom-line net profit after tax of $160.7 million in the six months to December, swinging from a loss of $104.9 million a year earlier.
However, private hospitals were not receiving their fair share of annually indexed health insurance premiums, threatening their viability, group CEO Natalie Davis said.
"We believe that those premiums that Australians pay should be passed on to hospitals," Ms Davis told analysts at an earnings briefing.
"The premium increases that have been approved for private health insurers over the last five years since COVID have not fully been passed through to private hospitals, and our benefit payout ratio has decreased over time."
The hospital sector was experiencing genuine cost pressures, and that discussion with private health insurer partners was ongoing, Ms Davis said.
Enterprise bargaining agreements with Victorian nurses continued, and followed a recently agreed 28 per cent increase over four years for public hospital nurses in the state.
Ms Davis offered little detail on the ongoing talks.
"We have to be competitive to be able to attract the nursing workforce that we need in every state," she said.
Ramsay's underlying net profit after tax grew 8.1 per cent to $171.1 million, supported by outperformance in its more than 70 hospitals.
Australia was the key driver of the result with underlying operating earnings growth of 7.1 per cent, supported by activity growth, higher patient acuity, improved private health insurance indexation and cost management.
"Ramsay's positive momentum has continued in the first half of FY26 with revenue, EBIT and NPAT growth as we execute on our three core priorities to improve performance and returns to shareholders," Ms Davis told an earnings briefing.
Ramsay operates more than 70 hospitals in Australia and manages more than 500 facilities worldwide.
Earnings from its UK hospitals were flat, while its Ramsay Sante business, which operates facilities in continental and northern Europe, grew operating earnings 4.4 per cent on the equivalent half to $116.7 million.
Ramsay announced earlier in the week that it plans to demerge Sante and distribute its 52.8 per cent stake in the business to shareholders later in 2026.
The board declared a fully franked dividend of 42.5 cents per share, up 6.3 per cent and representing a 60 per cent payout ratio of underlying earnings.
The results were welcomed by analysts and beat consensus expectations, RBC Capital Markets analyst Craig Wong-Pan said.
"We expect the market will like the performance of the Australian business and improved profitability in Elysium," Mr Wong-Pan said.
"While the earnings in the France business disappointed, we expect investors will view this as supportive of the board's decision to proceed with an in-specie distribution of Ramsay Sante."
Investors appeared to like the result, as Ramsay shares surged more than 13 per cent to $43.33 in morning trading.
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