Apollo Hospitals (APOLLOHOSP) Q4 02/03 earnings summary

Executive summary

• FY03 turnover reached Rs 4,485.51m; PAT rose to Rs 274.94m from Rs 247.05m, despite impairment, higher capital charges and tax provisions.

• Healthcare delivery, pharmacy retail and hospital management services drove growth; expansion increasingly used managed-hospital and franchise models.

• Network stood at 28 hospitals and 5,658 beds, with plans to reach 47 hospitals and over 8,000 beds by end-2004.

Financial highlights

• Turnover Rs 4,485.51m; EBITDA Rs 938.76m; PBT Rs 433.10m; PAT Rs 274.94m for FY03.

• Collections grew 19.21% YoY; operating profit growth was 21.94%, while operating profit margin was 20.24% versus 21.14% in FY02.

• Basic and diluted EPS was Rs 6.96 versus Rs 6.22 in FY02; proposed equity dividend was 30%, or Rs 3 per share.

• Consolidated FY03 revenue was Rs 4,676.17m; PAT after minority interest was Rs 220.19m and EPS was Rs 4.91.

Outlook and guidance

• Management expected higher occupancy, managed-hospital referrals and greater health-insurance penetration to support medium-term revenue and case-mix improvement.

• Planned occupancy improvements and tighter controls on average length of stay; new facilities in Sri Lanka, Kolkata and Ahmedabad were expected to break even within two years.

• No new owned hospitals planned in the medium term; growth strategy emphasized managed beds, overseas contracts, pharmacy and more efficient asset utilization.

• Expansion target: 47 hospitals and over 8,000 beds by end-2004, compared with 28 hospitals and 5,658 beds.