Fortis Healthcare (FORTIS) Q4 09/10 earnings summary

Executive summary

• FY2010 consolidated revenue rose 49% to ₹9,379.38 million; net profit was ₹700.05 million, up 191% YoY, following the first profitable year in FY2009.

• The Wockhardt acquisition established a pan-India network of 48 hospitals and about 8,000 beds; an overseas expansion via Parkway was later reversed after valuation rose to uneconomical levels.

Financial highlights

• Consolidated operating income was ₹9,379.38 million vs ₹6,305.45 million; total income was ₹9,872.51 million vs ₹6,589.38 million.

• Consolidated operating profit before depreciation, interest and tax reached ₹1,906.23 million, up 67% YoY; net profit attributable to shareholders was ₹694.82 million vs ₹208.19 million.

• Consolidated cash profit was ₹695 million vs ₹208 million, up 234%; organic revenue growth was 26%.

• Standalone operating income was ₹2,098.16 million; standalone net profit was ₹301.46 million vs a ₹71.49 million loss in FY2009.

Outlook and guidance

• Shalimar Bagh, with 350 beds in phase one, was complete and awaiting statutory clearances; the 414-bed Kolkata hospital was planned to open in Q2 FY2011.

• Gurgaon’s 450-bed phase-one hospital was targeted for completion in Q4 FY2011; the 335-bed Mulund expansion’s oncology unit was expected in Q2 FY2011.

• Occupancy had risen to 70–75%; management expected continued business growth and stabilization, supported by referral networks and community outreach.

• Growth plans emphasized domestic expansion and selective overseas acquisitions at appropriate valuations, with medical value travel identified as a future revenue driver.