Fortis Healthcare (FORTIS) Q4 13/14 earnings summary

Executive summary

• FY14 strategy pivoted toward India after divesting major overseas assets; India generated 94% of continuing-operations revenue, while divestment proceeds and fundraising sharply reduced leverage.

• Continuing-operations revenue rose 20% to ₹3,666 crore, but the continuing business recorded a ₹261 crore loss; total profit was ₹123 crore, including discontinued operations and divestment gains.

Financial highlights

• Consolidated continuing-operations revenue was ₹3,666 crore, up 20% YoY; total revenue including discontinued operations was ₹4,759 crore versus ₹6,052 crore in FY13.

• Continuing-operations EBITDA was ₹212 crore; operating EBITDAC before net Business Trust costs was ₹524 crore, with an 11.0% margin across continuing and discontinued operations.

• Continuing-operations loss after tax and minority interest was ₹261 crore versus profit of ₹485 crore in FY13; total consolidated profit was ₹123 crore versus ₹500 crore.

• Standalone revenue was ₹599 crore, up from ₹544 crore; standalone net profit rose to ₹24 crore from ₹17 crore, and basic EPS increased to ₹0.53 from ₹0.43.

Outlook and guidance

• Plans called for adding 500–600 beds annually over the next few years; existing sites could support capacity of ~10,000 beds over time.

• India was identified as the growth base, with brownfield expansion, selective greenfield projects, and development of Oncology and Mother & Child services prioritized.

• The India healthcare market was projected to grow at 15% CAGR through 2017; diagnostics was projected to reach ₹254 billion by 2015, growing at 28% CAGR.