Apollo Hospitals Sept qtr net down 23% on high depreciation, interest costs

Total income grew to Rs 1,854.27 cr during the quarter from Rs 1,643.54 cr a year ago

Apollo Hospitals Enterprise Ltd has posted a decline of 22.9 per cent in net profit at Rs 70.90 crore during the quarter ended September 30, 2017, as compared to Rs 91.99 crore during the same quarter of last year. The total income grew to Rs 1,854.27 crore during the quarter as against Rs 1,643.54 crore during the corresponding quarter of last year.

"It has been a good quarter where we have seen an overall recovery in volumes. It also reiterates the resilience of our model, powered by a strong focus by clinical and operational excellence," said Akhileswaran Krishnan, Chief Financial Officer of Apollo Hospitals. Overall the performance has been good for this quarter, he said.

The 23 per cent drop in PAT was as expected, due to higher depreciation and interest costs for the year, following investments in new hospitals. The company added almost 13 new hospitals at a capex worth over Rs 2,000 crore. All of these will start contributing to the business shortly. Some have already started contributing, Krishnan said.

The new hospitals have already seen steady growth this year. The Navi Mumbai hospital, however, posted a loss of Rs 10 crore during the quarter (Rs 15 crore in the year-ago quarter). Despite this, the Ebitda of the new hospitals combined has been Rs 9 crore positive, compared with a negative figure in the first quarter of the year, Krishnan said. Between the first and second quarters of this fiscal year, the company posted a 15 per cent increase in volume.

"Our Ebitda went up 31 per cent between the first and second quarters of this year," Krishnan added. While the Ebitda during the quarter declined by 0.3 per cent to Rs 212.2 crore from Rs 221.9 crore, it has been flat between last year and the current year. Apart from the loss in Navi Mumbai unit, the company has been absorbing Rs 10 crore every quarter towards stent cost. The implementation of Goods and Services Tax has also delivered a Rs 5 crore loss during the reporting quarter.

"Year on year we have delivered 11 per cent growth in healthcare services, our standalone pharmacies for the quarter have grown by 23 per cent, of which only 17 per cent has been recorded, since that is normalised for GST," said Krishnan. The revenue of existing hospitals was up six per cent while new hospitals grew by 36 per cent to Rs 368.2 crore during the first half of the fiscal.