I am pleased to present to you HCG's annual report for fiscal 2018-19 for the firsttime based on integrated reporting framework as defined by the principles of IIRC.
With this report we embark on a journey of reporting that we believe is a transparentcommunication framework encompassing qualitative and quantitative information.
We recorded net revenues of H 9787 million in FY19 registering a growth of17.87% as compared to H 8307 million in FY18. Our operating EBITDA grew by 5.4% toH 1252 million in FY19 as compared to H 1188 million in FY18. Our operating EBITDAmargin stood at 12.8% in the year under review falling by 170 bps as compared to previousyear due to expansions and new centers launches leading to dilution of our margins.
In our ongoing pursuit to build a scaled business and presence we witnessed a strongdouble-digit growth in revenue and an increasing share across Maharashtra Gujarat andentered Rajasthan. Our HCG centres contributed H 9143 million in total revenues a growthof 19.7% over previous year and continue their strong momentum while Milann centrescontributed H 644 million a negative growth of 3.8% over previous year owing to somechallenges faced in the business where we are showing signs of recovery already.
Cancer a life threatening disease
It calls for serious commitment today to address the rise in cancer disease across theglobe. While there are 9.6 million people who die from cancer every year the alarmingfact is more than 70% of the deaths occur in middle and low income countries. Althoughthere is a growing awareness and precautions for preventing the disease the availabilityof good quality care and affordability still remains a challenge in emerging countriesespecially India. Every year India reports more than a million new cancer cases whileseveral resulting in mortality due to biological technological and other factors.
Our journey over the past three years since listing has seen sustained growth in termsof operational performance. The new patients registrations at our cancer care centresmore than double since 2015-16. This shows the growing trust by patients in our brandpromise of focus on oncology technology and expertise to deliver outcomes. We continue togrow our capacity taking our beds count to 1872 beds. We are now focused on consolidationwith substantial footprint and improving business performance.
We strengthened our presence in Gujarat region with launch of oncology in Bhavnagar andnew multispeciality center in Rajkot with a strong year-on-year growth and improvedfinancial performance.
Our newly opened centre in Rajkot has been acknowledged by the patients for qualitycare with use of ultra modern technologies. We extended our presence in easternIndia with commencement of out-patient services in Kolkata. We also scaled up ourofferings with introduction of new cancer care diagnosis across Jaipur.
In the past 18 months we have nearly opened 7 new cancer care hospitals across thecountry reaching out to more people in metros and Tier-I & Tier-II cities. We hadintended to expand our presence to address the impact of increasing cancer diseases andestablish a comprehensive network as a leader. With more than H 7083 million ofcapex invested in last three years we are determined to generate returns from these overthe coming years while delivering outcomes matching global benchmarks.
One of the most critical elements of our business model is our people. Across ouroperations our team of 5879 includes 305 doctors including oncologists radiologistspathologists and specialists and 1798 nurses contribute to our capabilities and to ourbusiness sustenance. We continue to invest heavily in training of doctors nurses andother staff. During the year we rolled out specific initiatives aimed at improving theculture engagements leadership and overall development of our people. We strive tocreate a team of professionals that is focused on delivering our brand promise of"adding life to years".
Investing for sustainable growth
We have witnessed major changes in the healthcare industry over the years. Currentlywith rising cancer incidence we are focused on emerging as a comprehensive consistentand trusted oncology brand in India. Our investments in modern technologies and equipmentare fundamental drivers and differentiators of our business model. We believe that ourstrategy of widening our footprint in parts of India aligns to our business goals ofenabling access quality and accurate diagnosis and treatment for a larger part ofcommunity. Cancer treatments continues to evolve with new diagnostic and caremethodologies being developed. At HCG we invest in R&D and innovation to buildcapabilities as a pioneer in cancer treatment with focus of addressing unmet patientneeds.
The progress we have made so far highlights the soundness of the investments and thepotential for scale with long-term sustainability. Going forward we will continue tofocus on return on investments made over last few years and consolidation of our marketpresence. This in turn would help us build a healthcare company that delivers long-termvalue for all our stakeholders. The success of the past years can be ascribed to a trueteam effort by all our healthcare professionals and employees under the guidance of themanagement and a committed and capable board. I extend my gratitude to clinicians who haveguided the management team to lead the employees and take the company ahead. On behalf ofthe Board I would like to thank you our shareholders for your continued support. Welook forward to many more years of providing quality care to our patients and keep addinglife to years!
|Dr. B. S. Ajaikumar |