Covid-19 has material impact on healthcare services ops: Apollo Healthcare

Healthcare major Apollo Hospitals Enterprise on Tuesday said the Covid-19 pandemic has had a material impact on the company's healthcare services business operations, though its standalone pharmacy business continued to show growth momentum.

Due to the Covid-19 pandemic situation, the government had announced a countrywide lockdown, involving restrictions on international and domestic travel, while also issuing an advisory on postponing elective surgeries and undergoing preventive health checks,Apollo Hospitals said in a filing to the BSE.

The pandemic has led to a material impact on the healthcare industry in general and on company's healthcare services business operations due to severe travel related restrictions impacting both employee movements and patient flows to the hospitals, it added.

Outpatient footfalls were also impacted apart from incidence of postponement of elective procedures. Both factors in turn have led to a substantial reduction in the inpatient case loads, the filing said.

The current embargo on international travel has also impacted patient flows to hospital units located in metro locations such as Chennai, Hyderabad, New Delhi and Ahmedabad, it added.

The company pointed out that none of its operations were closed during this phase.

It stated that, "Our stand alone pharmacy segmental revenues and business performance were not impacted during the lockdown, and continue to show growth momentum."

However, "as a result of the Covid-19 pandemic situation, the overall patient volumes across our hospitals network has reduced by half, thereby adversely impacting healthcare segmental revenues while fixed costs required for maintaining business continuity continued to be incurred," the filing said.
 

The company has embarked on a host of cost optimisation measures to alleviate the situation, it added.

"However, we do not anticipate any issues at all related to the company's ability to undertake borrowings or service debt given its comfortable liquidity position and its ability to access debt at competitive levels, even in the current situation," Apollo Hospitals said.

The company has undrawn credit lines of Rs 400 crore and also has very strong relationships with large bankers in India, including development finance institutions(DFIs) who have expressed interest to support through debt -- short and long tenured, should the company need it, it added.
 

"Given the current huge demand supply imbalance that persists with regard to healthcare infrastructure within the country, Apollo Hospitals as the largest private health care services provider with its portfolio of more than 10,000 hospital beds is well positioned to continue to address the demand for high quality tertiary care across the country over the long term," it said.

The company does not anticipate any risks related to recoverability of receivables or supply chain related bottlenecks. Further, there has been no impact on internal financial controls in the current situation, it added.

On the future impact of the pandemic on the company's operations, Apollo Hospitals said it is still evaluating the full impact of the current situation on its business and will continuously calibrate responses to the Covid-19 situation as it evolves.

"We would like to however state that patient case loads and occupancies across our hospitals network have witnessed improvements post easing of lockdown related restrictions," it added.

Shares of Apollo Hospitals Enterprise on Tuesday closed almost flat at Rs 1,363.40 per scrip on the BSE.