HealthCare Global Enterprises (HCG) Q4 19/20 earnings summary

Executive summary

• FY20 consolidated operating revenue was ₹10,956.4m, up 12% YoY; operating EBITDA reached ₹1,721.8m, up 37.5%, with a 15.7% margin versus 12.8% after Ind AS 116 adoption.

• Consolidated net loss attributable to owners widened to ₹1,067.0m from ₹248.0m; diluted EPS was -₹12.05 versus -₹2.82.

• COVID-19, oncology drug margin caps and ramp-up costs at new centres weighed on performance; a post-year-end ₹5,128m equity and warrant raise supported liquidity and deleveraging plans.

Financial highlights

• Total revenue including other income was ₹11,026.1m, up 11.8% YoY; medical services revenue rose 13.7% to ₹10,076.3m, while sale of medical and non-medical items declined 1.8% to ₹729.7m.

• Total expenses rose 19.9% to ₹12,095.5m; finance costs increased 96.9% to ₹1,376.5m and depreciation/amortisation rose 74.5% to ₹1,484.5m, largely due to Ind AS 116.

• Operating cash flow was ₹1,301.4m versus ₹985.0m; investing cash outflow was ₹1,013.8m and financing cash outflow ₹584.3m.

• HCG-centre revenue was ₹10,255m, up 12.2% YoY; Milann contributed ₹701m, up 9%.

Outlook and guidance

• Two cancer centres in Kochi and Gurgaon were under development, with operations expected by end-CY2021 and CY2022, respectively.

• Priorities include cash-flow generation, stronger profitability and returns, debt and cost management, continued network expansion, and digital initiatives to improve patient care and internal efficiency.

• Milann and HCG Africa were targeted for value-accretive strategies; precision diagnostics and digital transformation were identified as growth opportunities.