Fortis Healthcare (FORTIS) Q4 08/09 earnings summary

Executive summary

• FY09 marked the first full-year consolidated profit since inception, with growth driven by higher revenue, improved specialty mix, procurement savings, productivity gains and cost control.

• Network reached 28 hospitals and nearly 3,300 beds; stated target was 40 hospitals and 6,000 beds by 2012.

Financial highlights

• Consolidated total income rose 20% YoY to Rs 6,589.38 million; operating income rose 24% to Rs 6,305.45 million.

• Consolidated operating profit before interest, depreciation and tax increased 85% to Rs 1,142.53 million; reported margin was 17.34% of total income vs 11.27% in FY08.

• Net profit attributable to shareholders was Rs 208.19 million vs a net loss of Rs 554.84 million in FY08; standalone net loss was Rs 71.50 million vs profit of Rs 26.18 million.

• Consolidated net profit included Rs 640.10 million compensation from an erstwhile promoter; excluding this extraordinary item, profit was Rs 144.18 million and EPS was Rs 0.64 vs reported EPS of Rs 0.92.

Outlook and guidance

• Target remained a 40-hospital, 6,000-bed network by 2012, supported by organic expansion, acquisitions and operations-and-management partnerships.

• Shalimar Bagh, with 258 beds in phase one, was expected to open in Q3 of FY10; Gurgaon’s 350-bed first phase was expected to complete in Q3 FY11.

• Management cited confidence in continued revenue and profit growth, with Shalimar Bagh and Gurgaon expected to add capacity and value.