Aster DM Healthcare revenue from operations improves by 17% to INR 1837 crore

Aster DM Healthcare

Aster DM Healthcare Q2FY2019 PAT Increased to Rs. 11 Crore From Rs. 0.51 Crore of Q2FY2018

Aster DM Healthcare, one of the largest private healthcare service providers in multiple GCC states and an emerging healthcare player in India, today announced its financial results for the quarter & half year ended September 30, 2018.

Aster DM Healthcare, one of the largest private healthcare service providers in multiple GCC states and an emerging healthcare player in India, today announced its financial results for the quarter & half year ended September 30, 2018.

The Company recorded a net profit of Rs. 11 crore for the quarter ending September 30, 2018. This represents a year-on-year increase when compared to a PAT of Rs. 0.51 crore registered in the same quarter of 2017.

Revenue from operations for Q2FY19 recorded an increase of 17% reaching Rs. 1,837 crore on sustained organic growth from its existing operations that includes 21 hospitals, 113 clinics and over 216 pharmacies in nine countries, including India.

The Company’s strong growth is a reflection of its focus on quality healthcare, the strength of its diversified healthcare offerings and a strong thrust on enhancing efficiencies.

Financial Performance Highlights

Performance Review for Q2FY19 vs. Q2FY18

  • Revenue from operations improves by 17% to Rs. 1,837 crore compared to Rs. 1,566 crore
  • EBITDA (excluding other income) reduces by 9% Y-o-Y to Rs. 125 crore compared to Rs. 138 crore
  • PAT increases to Rs. 11 crore compared to Rs. 0.51 crore
  • Diluted Earnings Per Share up to Rs. 0.22 as compared to Rs. 0.01

Performance Review for H1FY19 vs. H1FY18

  • Revenue from operations improves by 16% to Rs. 3,612 crore compared to Rs. 3,123 crore
  • EBITDA (excluding other income) grew by 40% Y-o-Y to Rs. 249 crore compared to Rs. 178 crore
  • PAT increases to Rs. 23 crore compared to loss of Rs. 76 crore
    Diluted Earnings Per Share up to Rs. 0.47 as compared to loss of Rs. 1.65

Commenting on the performance for Q2 & H1FY19, Dr. Azad Moopen, Chairman, Aster DM Healthcare, said: “We are happy with our performance in a quarter that is generally more muted because of the seasonal nature of businesses in the GCC. Our results are a reflection of our continuous striving for clinical excellence, our light asset business model and thrust on efficiencies.

Our India operations too improved despite the unfortunate floods in Kerala. India has embarked on a potentially path breaking initiative of Ayushman Bharat which we believe will have far reaching consequences in the tackling of morbidity & mortality rates across states in India, enabling quality affordable healthcare to all and creating a strong collaborative opportunity between the public and private sectors.

As we enter the second half of the year we look forward to further improved financial and operating performance backed by enhanced levels of clinical excellence.”

Aster DM Healthcare is a 30-year-old integrated and comprehensive healthcare service organization. The Company is one of the few entities across the globe providing the complete circle of care from primary, secondary, tertiary to quaternary medical care. These are manned by its 17,700+ employees from across the world, delivering on a simple yet strong promise to its people: “We’ll treat you well.”

The Company has the unique distinction of serving people by providing quality healthcare to all segments of the society regardless of their economic or social positioning. In line with this, Dr. Azad Moopen, Founder Chairman and Managing Director at Aster DM Healthcare conceptualized the Company’s three brands – Medcare for the high income, Aster for the middle-income and Access for low-income strata of the population. The Company has an asset light business model wherein the land and civil structure of most of its hospitals are leased. It is also optimally positioned in the Medical tourism sector with a large number of GCC residents visiting India to avail quality and cost-effective healthcare.

Seasonality

Seasonality is unique to GCC businesses and skews the picture significantly for the first and second half-financial year results.

There is a decline in volumes across hospitals, pharmacies and segments during the summer months in the GCC countries. Expats form a major proportion of the population in GCC countries barring Saudi Arabia and during the extreme summer season and school holidays, a large amount of population leave the GCC region. Some doctors also travel back to their home country during this period as well. The impact is visible across industries and reflected particularly more in primary care facilities like clinics and pharmacies.

H1 and H2 revenues in GCC are usually split in 45%-55% but the EBITDA split can vary as much as 30% and 70% for H1 and H2. Increase in revenue in H2 results in proportionately larger increase in profitability due to operating leverage. Seasonality variation has consistently been visible over several years and can be expected to continue.

Segmental Performance

Hospitals

Aster DM Healthcare’s Hospital network consists of 10 hospitals in GCC states and 11 multi-specialty hospitals in India. Our hospitals in India are located in Kochi, Kolhapur, Kozhikode, Kottakkal, Bengaluru, Vijayawada, Guntur, Wayanad and Hyderabad and are generally operated under the “Aster”, “MIMS”, “Ramesh” or “Prime” brands.

Revenues increased by 18% to Rs. 1,825 crore in H1FY19 from Rs. 1,547 crore in H1FY18. EBITDA increased by 55% from Rs. 128 crore in H1FY18 to Rs. 198 crore in H1FY19. The EBITDA margin was at 10.8% in H1FY19 compared to 8.3% in H1FY18. This performance was driven by addition of new specialties, services and increase in beds. In-patient count was 106,200+ H1FY19 as compared to 100,200+ in H1FY18, a growth of 6%. Out-patient visit was 1.53 mn in H1FY19 as compared to 1.4 mn in H1FY18 with a growth of 9%.

Clinics

One of the largest and most widespread network of clinics across the Middle East. Our clinics in India are located at Kochi, Kozhikode, Eluru and Bengaluru. The Aster DM network has 113 clinics in total with 104 clinics in GCC states and 9 clinics in India.

Clinics have been critical in developing Aster’s brand salience, principally in new locations and geographies. Clinics act as a referral for Aster hospitals. Clinics 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 increased by 13% to Rs. 915 crore in H1FY19 from Rs. 811 crore in H1FY18. EBITDA for GCC clinics increased 44% from Rs. 68 crore in H1FY18 to Rs. 98 crore in H1FY19. The EBITDA margin was at 10.7% in H1FY19 compared to 8.4% in H1FY18. This performance was driven by ramp up in new clinics set up in GCC states in the recent past and increase in footfalls from existing clinics.

Pharmacies

We are the largest pharmacy chain in the GCC with 216 retail stores including 183 in UAE, 7, 12, 6, 6 and 2 in Kuwait, Jordan, Qatar, Oman and Bahrain respectively. An improving product mix combined with exclusive tie ups and strong associations with various pharma companies have all resulted in a healthy profitability profile.
Revenues increased by 23% to Rs. 952 crore in H1FY19 from Rs. 774 crore in H1FY18. EBITDA increased 14% from Rs. 54 crore in H1FY18 to Rs. 62 crore in H1FY19.

Medical Excellence Highlights

Since inception, Aster DM Healthcare has been in continuous pursuit to push boundaries of excellence in health care and cater to the needs of patients, thereby setting global benchmarks in the field of medicine and patient care. It has accomplished numerous milestones and performed several surgeries that were “firsts”. Mentioned below are some of the significant achievements, in the quarter under review, that are a testament to our clinical excellence:

  • For the first time in North Kerala, Aster MIMs hospital performed an Endoscopic Vein Harvesting for CABG (Coronary artery bypass grafting)
  • A benign tumor that weighed 4.5 KG was removed from the thoracic cavity of a patient by the Cardiac team at Aster MIMs Hospital in Calicut, Kerala
  • A fully amputated arm was reimplanted successfully by a plastic surgeon and the team at Aster MIMs
  • Phrenic Nerve Stimulation for diaphragmatic palsy was performed by Neurosurgery team at Aster CMI Hospital in Bangalore
  • Mechanical Thrombectomy performed by Neurosurgery team at Aster CMI Hospital in Bangalore
  • Dorsal column stimulation for traumatic paraplegia was performed by the Neurosurgery team at Aster CMI Hospital in Bangalore
  • Integrated Liver Care Team at Aster CMI Hospital used a deceased donor liver with an exsitu split to benefit 2 patients at Aster CMI Hospital in Bangalore
  • An Obstetrics and Gynaecology Consultant at Aster Sanad Hospital delivered a baby on-board a flight from Saudi to Philippines

Milestones and introductions

  • Aster Medcity completed 100 Liver transplants in July 2018 and100 Robotic Gynae Surgeries in August 2018
  • New procedures have been introduced at Aster MIMS Hospital, Calicut: Deep Brain Stimulation surgery, Laser Surgery for Hemarhoid and Varicose Veins, Minimally Invasive Spine Surgery
  • Aster Medcity Launched a Vertigo Clinic in September 2018
  • Medcare partnered with The United Medical Eastern Services (UEMedical) to launch a new HealthPlus Fertility Centre in Dubai
  • Medcare Women and Children Hospital announced the opening of the first DHA accredited Fetal Medicine Unit in the UAE
  • New specialty clinics launched by Ramesh Hospitals: Cardiology Clinic in Markapuram, Gastroenterology Clinic and Pulmonology Clinic in Tenali
  • Aster CMI Hospital received NABH Accreditation

Corporate Social Responsibility (CSR) Highlights

The Company strongly believes that profit should be a by-product and not the purpose in healthcare, as a result of which there are key initiatives to give back to the society. Through the initiatives undertaken by Aster Volunteers Global Programme and the Aster DM Foundation, around 775,723 lives were touched till date. Some of the key highlights include:

  • “Aster Volunteers” a global programme launched on the occasion of Aster’s 30th anniversary, aims to bridge the gap between people who would like to help with those in need. Some of the key highlights between July – September include:

 

  • Aster Homes Fund of Rs. 15 crore was promised as an effort to rebuild Kerala after the floods. The Aid Kerala project which was initiated to provide humanitarian aid to the victims right after the flood benefitted more than 50,000 people
  • Around 41,716 individuals were treated through mobile medical services in GCC and India through 340 medical camps
  • Basic Life Support training was conducted for 9,842 individuals
  • Around 3,618 free investigations and surgeries were conducted
  • 70,727 individuals were treated through 422 medical camps

 

  • The Aster DM Foundation has been contributing through the following activities across various geographies:

 

  • Free Dialysis benefitted 36,141 people
  • Free Treatment Subsidy worth ~INR 4.3 million provided
    Community Good Health Programme benefitted 47,520 people (UAE, Qatar, Philippines, India)
  • The Diseases Detection & Cancer Screening Programme benefitted 2,462 people
  • Education & Social Empowerment Programmes MILEs benefitted 110 people

DISCLAIMER:

Certain statements in this document that are not historical facts are forward looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, local, political or economic developments, technological risks, and many other factors that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. Aster DM Healthcare will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.