Fortis and Apollo report healthy profit growth

Fortis and Apollo report healthy profit growth

New Delhi: Fortis Healthcare Ltd reported a net profit of Rs70 crore for the year ended 31 March, an increase of 234% from the previous fiscal. Operating revenue rose 49% to Rs938 crore and operating profit grew 64% to Rs140 crore.

Its rival Apollo Hospitals Enterprise Ltd posted a net profit of Rs152 crore, an increase of 24.4% over the previous fiscal. Revenue from operations was at Rs1,825.7 crore, an increase of 25.2% from a year ago.

For the quarter to 31 March, Fortis recorded a net profit of Rs27.2 crore, up 419% over the same quarter last year. Revenue from operations stood at Rs329.5 crore, a growth of 91%.

These numbers include the financial performance of eight of the 10 hospitals acquired from Wockhardt Ltd. In the quarter, Fortis also rebranded these hospitals as Fortis Hospitals.

Apollo reported a net profit of Rs29.2 crore, an increase of 0.2% over the same quarter in the previous year. Revenue from operations for the quarter was at Rs483 crore, up 23.4%.

In March, Fortis had bought a 25.3% stake in Singapore-based Parkway Holdings Ltd to expand its footprint in the Asia-Pacific. The deal was valued at $685.3 million (Rs3,187 crore today). Fortis concluded issuance of $100 million in foreign currency convertible bonds to fund its recent acquisition. By the end of June, it expects to conclude its warrants and preferential shares issue as well, from which it will repay the bridge loan it took for the Parkway acquisition.

“At the end of March, our debt-equity ratio was 2.2, but by the end of June, once we repay the loan, it will come down to 0.6-1," said Yogesh Sareen, chief financial officer of Fortis Healthcare.

However, on Thursday Fortis’ Singapore acquisition came under a cloud with Khazanah Nasional Bhd, Malaysia’s state investment company, making a bid of $839 million to acquire an additional 28% in Parkway and take its stake in the company to a little more than 51%. Khazanah also holds a 13% stake in Apollo Hospitals.

Fortis declined to comment on the matter.

Scrip movement

India’s two largest healthcare services firms moved in opposite directions after they announced their fourth quarter and annual results for the fiscal. Fortis fell 1.6% to Rs147.45 while Apollo rose 0.32% toRs763.85.

The Bombay Stock Exchange’s benchmark Sensex index rose 1.18% to close at 16,863.06 points.

Fortis declined because people are worried that it may go for a counter offer, which will put further pressure on its balance sheet, according to a Mumbai-based analyst of a foreign brokerage. He declined to be named because he is not authorized to speak with the media.

Apollo in a statement issued late on Thursday indicated its support for Khazanah’s integrated healthcare strategy for a large prominent role in Asia’s larger healthcare player. The firm also said it is willing to participate with Khazanah in achieving greater penetration in the Asian region.