Fortis Healthcare (FORTIS) Q4 10/11 earnings summary

Executive summary

• FY2010-11 marked full-year consolidation of 10 Wockhardt hospitals and expansion to a pan-India network of 62 hospitals, with growth focused increasingly on smaller cities.

• Strategy centered on integrated care, clinical quality, standardized processes, tier II/III expansion and asset-light growth; SRL diagnostics acquisition was completed after year-end.

Financial highlights

• Consolidated operating revenue was ₹14,829.71 million, up 58% YoY; total income was ₹19,417.24 million, up 97%, including ₹4,587.53 million of other income.

• Consolidated PBDIT was ₹5,070.51 million, up 166%; net profit attributable to shareholders was ₹1,243.64 million versus ₹694.82 million.

• Excluding the Parkway transaction, operating income was ₹1,483 crore and EBITDA ₹301 crore, each up 58% YoY; the Parkway sale generated a ₹345 crore gross profit.

• Organic revenue growth was 28%; operating profit was ₹209 crore, up 49%, while net profit from operations rose 53% to ₹106.4 crore.

Outlook and guidance

• FY2011-12 target: treat more than 2 million patients; expansion emphasis remains on tier I/II cities and access in tier II/III towns.

• Twelve projects are planned to add over 2,200 beds over 2–3 years; Gurgaon flagship launch was delayed and expected in Q4 FY2012.

• Medical tourism represented 6% of operating revenues and exceeded ₹100 crore; further growth was expected through international referrals and partnerships.