HealthCare Global Enterprises (HCG) Q4 18/19 earnings summary

Executive summary

• FY19 consolidated revenue rose 17.8% to ₹9,786.7 million, while operating EBITDA increased 5.4% to ₹1,251.9 million; expansion costs and ramp-up losses diluted margins.

• Capacity expanded to 1,872 beds across 24 centres; cancer-centre registrations reached 72,110, up from 55,332 in FY18.

• Focus shifts from rapid expansion to consolidating the network, improving returns on recent investments and completing two planned centres.

Financial highlights

• Consolidated operating revenue was ₹9,786.7 million, up 17.8% YoY; total income including other income was ₹9,860.8 million, up 16.9%.

• Operating EBITDA reached ₹1,251.9 million, up 5.36% YoY; margin fell to 12.8% from 14.3%, primarily due to incremental losses at new centres.

• Loss attributable to owners was ₹248.0 million versus profit of ₹205.2 million in FY18; higher finance costs, depreciation and foreign-currency translation losses were cited.

• Cash generated from operations was ₹985.0 million versus ₹978.1 million; investing cash outflow was ₹2,382.0 million and financing inflow was ₹835.1 million.

Outlook and guidance

• Priorities include consolidating the expanded network, improving returns on recent capex and strengthening profitability through scale, lean management and operating efficiencies.

• Two centres in Kochi and Gurgaon were under development; operations were expected to commence by the end of calendar years 2021 and 2022, respectively.

• Longer-term financial aims include revenue growth, stronger EBITDA and PAT margins, cash generation, higher EPS, efficient debt servicing and healthy ROCE and ROE.