Aster DM Healthcare, one of the largest private healthcare service providers in multiple GCC states and an emerging healthcare player in India, announced its financial results for the quarter ended September 30, 2019.
Effective 1 April 2019, the Group adopted Ind AS 116 'Leases', applied to lease contracts existing on 1 April 2019 using the modified retrospective method and has taken the cumulative adjustment to retained earnings, on the date of initial application. Accordingly, comparatives for the year ended 31 March 2019 have not been retrospectively adjusted. The effect of this adoption has resulted in a decrease in other expenses, an increase in interest expenses (included under finance cost) and an increase in depreciation and amortization expenses for continuing operations.
The Company recorded a net profit of Rs. 27 crore for the quarter ending September 30, 2019, before the impact of Ind AS 116. This represents a year-on-year increase of 118% from a PAT of Rs. 13 crore registered in the same quarter last year.
Revenue from operations for Q2FY20 recorded an increase of 14% reaching Rs. 2,087 crore on sustained organic growth from its existing operations.
Financial Performance Highlights
Performance Review for Q2FY20 vs. Q2FY19
Revenue from operations improves by 14% to Rs. 2,087 crore compared to Rs. 1,837 crore EBITDA (excluding other income and before Ind AS 116) increases by 39 % Y-o-Y to Rs. 174 crore compared to Rs. 125 crore. EBITDA post Ind AS 116 impact for Q2FY20 is 245 crore. PAT (adjusted for exceptional income in previous year) increases to Rs. 27 crore compared to Rs. 11 crore. PAT post Ind AS 116 impact for Q2FY20 is Rs. 3 crore.
Commenting on the performance for Q2FY20, Dr Azad Moopen, Chairman, Aster DM Healthcare, said:
“The first half of the financial year has been very fruitful. We have seen steady performance and growth in what is an unseasonal period.
Over the review period, we have endeavoured to strengthen our operations and rationalize costs while maintaining our emphasis on quality healthcare. Our efforts to strengthen the India business continue wholeheartedly with a focus on tier-one cities. Post the launch of the Aster RV hospital in Bengaluru in Q1 FY20; we have also signed two new leases for hospitals in Bengaluru this quarter.
Going forward our focus will be on continuously enhancing our standards of clinical excellence, ramping up our new hospitals, rationalising costs and continuously exploring viable inorganic and organic opportunities.”
Aster DM Healthcare’s Hospital network consists of 12 hospitals in GCC states and 13 multi-speciality hospitals in India. Our hospitals in India are located in Kochi, Calicut, Kottakkal, Wayanad, Kannur, Bengaluru, Kolhapur, Vijayawada, Guntur, Hyderabad & Ongole and are operated under the “Aster”, “MIMS”, “Ramesh” or “Prime” brands. In the GCC the company’s hospitals are located in UAE, Oman, Saudi Arabia and Qatar.
Revenues increased by 22% to Rs. 1,143.7 crore in Q2FY20 from Rs. 940.5 crore in Q2FY19. EBITDA (excluding other income and before the impact of Ind AS 116) increased by 38% from Rs. 103.3 crore in Q2FY19 to Rs. 142.6 crore in Q2FY20. The EBITDA margin was at 12.5% in Q2FY20 compared to 11% in Q2FY19.
The Aster DM network has 116 clinics in total with 108 clinics in GCC states and 8 clinics in India.
Clinics act as a referral for Aster hospitals. Clinics are also crucial for pharmacies and most pharmacies are integrated with clinics, which ensure higher footfalls and faster breakeven. The asset-light nature of clinics along with higher return ratios has helped Aster expand its network of clinics rapidly without impacting its balance sheet.
Revenues for GCC clinics in Q2FY20 remained steady at Rs. 459 crore as compared to Rs. 462 crore in Q2FY19. EBITDA for GCC clinics decreased 6% from Rs. 44.4 crore in Q2FY19 to Rs. 41.8 crore in Q2FY20. We expect EBITDA to be normalized during the year. EBITDA margins stood at 9.1% in Q2FY20 compared to 9.6% in Q2FY19.
We have a large pharmacy chain in GCC with 238 retail stores including 205 in UAE, 6, 11, 6, 8 and 2 in Kuwait, Jordan, Qatar, Oman and Bahrain respectively. Revenues increased by 13% to Rs. 544 crore in Q2FY20 from Rs. 480 crore in Q2FY19. EBITDA increased by 21% from Rs. 33 crore in Q2FY19 to Rs. 40 crore in Q2FY20.
Medical Excellence Highlights
Mentioned below are some of the significant achievements, in the quarter under review, that are a testament to clinical excellence:
Aster Hospital Mankhool performed 1000 Cath Lab procedures within one year of the lab’s launch First 3-way SWAP transplant was performed in Kerala at Aster MIMS Hospital, Calicut Craniotomy and subtotal excision of brain tumour was performed at Aster Hospital, Al Qusais on a 42-year-old Indian male patient with advanced equipment like the Neurosurgical Microscope, Craniotomy Drill System and Micro-neurosurgical instruments Awake craniotomy was performed at Aster MIMS Hospital in Kannur, successfully removing a deep-seated brain tumour whilst keeping the patient awake and engaged in conversation, in a rare surgical accomplishment Advanced Cervical Spine surgery performed at Aster Hospital, Al Qusais on a 38-year-old Indian male patient who was suffering from severe neck pain, weakness in all 4 limbs and inability to walk