Fortis Healthcare, India’s second-largest hospital chain reported a profit after tax of Rs 67.8 crore in the first quarter ended June 30, led by a strong uptick in operational profitability for both the hospitals and the diagnostics businesses.
Fortis reported a net loss of Rs 70.9 crore in the same period last year.
The net profit in Q1FY20 was also aided by a reduction in the cost of borrowings and the elimination of hospital service fee due to the acquisition of RHT assets.
Revenues grew 9.2 percent to Rs 1,138 crore in Q1FY20, compared to last year’s Rs 1,042 crore.
Hospitals business revenues grew 11.3 percent year-on-year (YoY) to Rs 913 crore, while the diagnostic business sales grew 4.2 percent to Rs 258.4 crore.
The finance cost in the first quarter dropped 33 percent YoY.
Fortis reduced its gross debt to Rs 1,388 crore in Q1FY20 from Rs 1,657 crore in Q1FY19, with a debt-equity ratio of 0.14 times.
The EBITDA margin stood at 12.5 percent in Q1FY20.
The occupancy levels, improved to 66 percent in Q1FY20, versus 62 percent in Q1FY19.
Fortis has been charting a turnaround story, with Malaysia’s IHH Healthcare winning the bids to acquire the healthcare provider by infusing Rs 4,000 crore by way of preferential allotment in July 2018. IHH also completed the acquisition of assets under RHT in January 2019, saving Fortis the entire clinical establishment fee being paid to RHT. Fortis hospital assets are housed under RHT, which is listed in Singapore.
However, the proposed open offer to acquire up to 26 percent of expanded capital of Fortis was stayed by Supreme Court, in a case related to Daiichi Sankyo versus Singh brothers over Rs 3,500-crore arbitration.
“Our Q1 results signify the momentum that we continue to see in our business with both the hospital and the diagnostic business having witnessed a healthy improvement in performance,” said Dr Ashutosh Raghuvanshi, MD and CEO, Fortis Healthcare.
“Our liquidity position has further strengthened, and we continue to undertake various measures to improve our cash flows,” Raghuvanshi said.
Raghuvanshi added the company has been moving ahead expeditiously with capex and investment plans to expand and commission new medical programs, advanced treatment technologies, value-added service offerings and brownfield expansion across select key facilities in Bengaluru, Noida, Mumbai and Kolkata hospitals.
Simultaneously, focus on increasing cost efficiencies across the organization continue unabated.
Raghuvanshi said the company is evaluating all options to recover Rs 445 crore siphoned by ex-promoters Singh brothers through a maze of inter-corporate deposits (ICDs). – Moneycontrol