Fortis Healthcare (FORTIS) Q4 06/07 earnings summary

Executive summary

• FY07 consolidated total income rose 77% YoY to Rs 525.40 crore; net loss attributable to shareholders was Rs 98.12 crore, versus Rs 48.94 crore in FY06.

• Standalone total income increased 33% to Rs 132.81 crore, while net loss widened to Rs 48.69 crore from Rs 27.95 crore.

Financial highlights

• Consolidated operating profit before finance costs, depreciation and amortisation rose 122% to Rs 61.52 crore; operating margin improved 2.39 percentage points YoY.

• Consolidated loss before tax and prior-period items was Rs 88.29 crore; reported EPS was -Rs 5.73 versus -Rs 5.76 in FY06.

• Standalone operating profit before finance costs, depreciation and amortisation increased 57% to Rs 13.86 crore; loss before tax and prior-period items reached Rs 46.36 crore.

• Consolidated financial expenses were Rs 66.00 crore and goodwill amortisation was Rs 45.53 crore, weighing on reported results.

Outlook and guidance

• Healthcare demand was expected to grow strongly given the supply shortfall; the hospital network was positioned to address rising demand for high-end care.

• Navi Mumbai hospital IPD services were expected to begin in Q1 or Q2 FY08, with a further Rs 35 crore of capital expenditure estimated to launch operations.

• Plans included standardising hospital operating processes, strengthening procurement and optimising capital expenditure to improve scalability and project viability.