Fortis Healthcare on Wednesday reported a profit after tax of Rs 111 crore for the quarter ended September, bringing some relief to the company which has been caught in a crossfire in the Daiichi case. The company had posted a net loss of Rs 166.6 crore for the corresponding period of previous fiscal, Fortis said.
“Q2 FY20 continues to see a healthy business momentum with an improvement in operational profitability in both the hospitals and the diagnostics business,”India’s second largest healthcare provider said in a statement.
While the revenues grew 6.3 percent to Rs 1,212.2 crore in Q2FY20, last year during the same period it reported the revenues of Rs 1,139 crore.
The hospitals business revenues grew 8.1 percent year-on-year (YoY) to Rs 972.3 crore. The diagnostic business revenue stood at Rs 276.6 crore, with a growth of 3 per cent.
“Investments are on track for upgrading and commissioning new medical equipment and advanced medical technologies in select facilities. Plans for new medical programs in select key hospitals progressing well,” it further added.
The EBITDA margin stood at 15.7 percent in Q2FY20, as against 6.6 percent last year for the same period.
All key operating metrics of the hospital business witnessed a robust improvement. The occupancy and average revenue per occupied bed (ARPOB) for the quarter stood at 72 percent and Rs 1.54 crores in Q2FY20 contrary to 69 percent and Rs 1.49 crores in Q2 FY19, respectively.
In July 2018, Malaysia’s healthcare provider IHH Healthcare won a multi-pronged bidding war to acquire Fortis and completed the deal in November—buying a 31.1% stake through preferential allotment of shares. To stabilize the business, IHH immediately infused ₹4,000 crore in Fortis, but an additional ₹3,400 crore put in an escrow account to initiate an open offer is stuck due to a Supreme Court-ordered status quo on the IHH-Fortis deal. The open offer was scheduled to start on December 18 and conclude on January 1.
The Supreme Court had in December put on hold the Fortis-IHH deal, ordering a status quo with regard to sale following a contempt plea moved by Japanese drug maker Daiichi Sankyo Co. Ltd against the Singh brothers, the former promoters of Fortis. While the case is pending decision, Dr Ashutosh Raghuvanshi, MD and CEO, Fortis Healthcare said that “While challenges remain, our strategic actions and initiatives lay emphasis on consolidation and growth. With a stronger Balance Sheet and improving operational performance we are actively pursuing our investment and capex plans so as to enable and provide our clinicians and administrators a relatively stronger ecosystem for driving future performance. Simultaneously, we have and continue to foster a culture of cost consciousness across the organization without compromising on our quality and care. All these should gradually should also reflect in the performance of the Company over the medium and long term and I do believe that Q2 FY 20 results are reflective of this intent and direction.”