Fortis Healthcare slips after posting Q1 net loss of Rs Rs 179 cr

Fortis Healthcare fell 1.14% to Rs 134.25 after the company reported a net loss of Rs 178.90 crore in Q1 June 2020 compared with net profit of Rs 67.81 crore in Q1 June 2019.

Consolidated operating revenues in Q1 FY21 fell 46.77% to Rs 605.9 crore from Rs 1138.3 crore reported in Q1 FY20. Hospital business revenues were at Rs 488.3 crore (down 46.51% YoY) while the revenue from the diagnostic business was at Rs 140.4 crore (down 45.66% YoY) during the quarter.

Fortis recorded an EBITDA loss of Rs 98.8 crore in the June quarter as against a profit of Rs 161.8 crore in the same period last year. Fortis recorded an income of Rs 45 crore under exceptional items as it was a concession received due to COVID-19. Before exceptional items, the company reported a pre-tax loss of Rs 208.7 crore in Q1 FY21 as compared to a pre-tax profit of Rs 42.8 in Q1 FY20.

"The results in the quarter reflect the impact of the COVID-19 pandemic that began in February and the subsequent nationwide lockdown that was witnessed. With the gradual opening up of the economy in May, the business momentum improved and saw initial signs of gradual uptick in progressive months. However, given the increase in cases across the country, the international travel restrictions still in-force, the limited period lockdowns in select states and the ongoing regulatory uncertainty; the company continues to face challenges resulting in the pace of recovery being slower than expected.

For the hospital business, both OPD and IPD volumes have shown a month on month improvement resulting in a gradual recovery of non-covid patient flow in the Company's facilities. While encouraging, majority patients are still choosing to further postpone elective surgeries. This is reflected in the hospital occupancy which witnessed a buoyant rise from 29% in the month of April '20 to 47% in June and stood at 51% for the month of July. Initial occupancy trends in August are similar to July.

The overall diagnostic business revenues reached 80% & 86% of pre-covid revenues in June'20 and July'20, respectively. Covid test volumes continue to witness a robust increase and contributed approx. 29% to overall diagnostic revenues in the quarter.

Despite the constrained environment, the company has been able to successfully manage its liquidity position by extending its cost rationalization initiatives including voluntary salary reductions, lower administrative and sales and marketing costs and undertaking only necessary capex allocation. In addition to this, better working capital management, availability of bank funding and a gradual improvement in business momentum is enabling the company to navigate the temporary challenges due to the current pandemic," the healthcare services provider said in a statement.

Fortis Healthcare is a leading integrated healthcare delivery service provider in India. The healthcare verticals of the company primarily comprise hospitals, diagnostics and day care specialty facilities. Currently, the company operates its healthcare delivery services in India, Dubai and Sri Lanka with 36 healthcare facilities, approximately 4,000 operational beds and over 400 diagnostics centres.

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