We have commissioned two new hospitals increased the number of beds from 4651 to4762.
It gives me great pleasure to present in front of you the first annual report of AsterDM Healthcare Limited after successful listing on Indian Stock Exchange on 28th February2018. Aster DM Healthcare is a 30-year old well integrated comprehensive healthcareservice organization with presence in 9 countries.
I consider it appropriate to share with all of you some basic facts about the company.Our presence in India dates back to 2001 with a large 300-bed hospital in Kerala.Proportion of our revenue from India has grown from 11% in FY15 to 17% in FY18. Even nowwe have 83% of revenues coming from the establishments outside India and hence we have theunique distinction of being one among the very few companies listed in the Indian stockmarket with operating units income and profits arising outside India.
Before providing operational and strategic achievements about the company I would liketo share with you our financial performance for the FY18. I am extremely happy to announcethat we have posted a revenue growth of 13% (constant currency growth of 18%) for thewhole year and we have delivered a 189 % (constant currency growth of 200%) growth in PAT(pre - non-controlling interest) during FY18.
The revenues (excluding finance and investment income) for FY18 stood at RS.6760 croreand EBITDA at RS.651 crore.
Apart from the successful listing and good financial performance FY18 has been aneventful year for Aster DM Healthcare. We have commissioned two new hospitals increasedthe number of beds from 4651 to 4762. We have 17335 employees as on 31 March 2018. Wetake pride in the fact that we are a comprehensive service provider ranging from Primaryto Quaternary medical care in 9 countries through our 101 Clinics 19 Hospitals and 207Pharmacies. We also have the unique distinction of serving the customers by providingquality healthcare to all segments of the society regardless of their economic or socialpositioning. In line with this we conceptualized the Company's three brands - Medcare forthe high income Aster for the middle-income and Access for low-income strata of thepopulation. We have perfected these models in UAE over last 10 years and can roll it outin other geographies as and when required. This gives us a unique strategic advantage toserve the full pyramid of human population.
More important to us than the number of establishments is our achievements in the areaof clinical quality and patient care. We are proud that most of our hospitals in India areaccredited by the NABH. In fact way back in 2007 our MIMS hospital at Calicut became thefirst multi-specialty hospital in India to be accredited by the NABH. We have sixhospitals including one in India that are accredited by Joint Commission International(JCI). Our highly specialized doctors are providing excellence in patient care and doingmany procedures that have been attempted for the 'first' time in the country. Someexamples include the paediatric dual liver and kidney transplant from a live donorrobotic trans-vaginal renal transplant minimally invasive multilevel cervical discdecompression etc. Recognition by way of awards were plenty some of the important onesduring the year include the Asia Healthcare Excellence Award FICCI Award for HealthcareInnovation Asian Hospital Management Association Award Dubai Quality Appreciation AwardInternational Patient Safety Award etc. In this digital age one of the best barometers ofperformance for any institution is the Google Rating. I am proud to share that you willsee us at the top of the list in Google Rating in most places where our establishments arepresent.
Our greatest strengths are the soundness of our vision philosophy and values rooted inethical approach which is important for any industry more so in the healthcare sector. Weenvision a 'Caring Mission with Global Vision' with the philosophy that 'Profit should bethe by-product and not the aim in health care'. Our six core values are Passion for thework we do Respect for all stake holders Integrity in our actions Compassion to ourpatients Excellence in what we do and Unity as a Team. We make it a reality through theteam work of a seasoned and committed management and clinical team. We are proud that theretention of our senior management and top consultants have been over 90% in last 10years. Focus on human capital investments in state-of-the-art equipment and fostering anenvironment of innovation has helped us retain skilled talent reflected in our lowattrition rate. The Company has 17335 employees who we proudly call 'Asterians"including 1430 doctors and 7926 nursing and paramedical personnel focused on deliveringcompassionate care through our brand promise to clientele: 'We'll Treat You Well.'
I would like to call to your attention an unique aspect of seasonality of operations inour business which impacts our financial performance. The seasonality is because of thedecline in volumes across hospitals pharmacies and segments during the summer months inthe GCC countries from where we derive about 80% of our annual revenues. The RS.1 and RS.2revenues in GCC are usually split 45%-55% but the EBITDA split can vary as much as 30% and70% for RS.1 and RS.2. This is due to the high fixed cost and financial efficiencieskicking in with higher revenues in RS.2. This skews the picture significantly for thefirst and second half-yearly results.
While we have done very well in the last 10 years in business growth and financialperformance we are aware of the challenges and risks
in doing business in multiple geographies. One of the challenges for us with largeportion of the revenues arising from GCC is the oil price to a certain extent. We havefaced the impact of this in Saudi Arabia couple of years back with receivables going upand have restructured the business to insulate against this as much as possible in thelast two years.
Another key challenge is getting good healthcare professionals for the ever-expandingneed of our institutions. While this is a challenge for all healthcare companies we aremarginally in a better situation because of the access to the medical and paramedicalgraduates passing out of our own sister institutions in Kerala. There are challenges likeincrease in minimum wages of nursing and paramedical staff in some of the geographies likeKerala where we have significant presence but we hope that we can manage this by marketcorrection of tariff as we go forward.
Healthcare as we all know is a sector with significant potential in geographies likeIndia and GCC. At the macro level the GDP spent on healthcare in India is very low andthere is significant demand supply gap. Low affordability and insurance penetration aremajor reasons why healthcare hasn't taken off to the extent required. With the newNational Health Protection Scheme announced by the Central Government covering half of thepopulation in India we expect improvement of capacity utilization in some of our Indianhospitals and scope for further expansion. Our strategy for India is to focus on largehospitals in Metros and Tier-I cities with an asset-light model. We also foreseesignificant potential in bringing patients to our hospitals in India for high endprocedures due to our presence in GCC countries through medical value travel. We alreadyhave 15-20% of revenues of some of our large hospitals like Aster Medcity in Kochi comingfrom foreign patients. We have a large part of our business in GCC with an asset-lightmodel providing high ROCE. Further our GCC operations is exposed to stable currenciespegged to US dollars creating a natural hedge to currency fluctuations.
We look forward to a great year ahead with the trust and faith of our shareholders andpatients. I would like to thank all our shareholders who have put their trust on us. Iwould also like to thank our employees for their dedication and hard work and look forwardto another exciting year.
Dr. Azad Moopen
Founder Chairman and Managing Director.