Commenting on the performance for Q1FY19, Dr. Azad Moopen, Chairman, Aster DM Healthcare, said, “We are encouraged by our performance which is a reflection of the appreciation for quality healthcare.

Given the seasonal nature of businesses across the GCC region wherein the peak summer months of April to September tend to be muted, we track yearly performance as against sequential.

Seasonality variation during the summer, expatriates going on annual vacation has been a consistent feature for several years and we are confident of delivering a strong H2 with higher revenues and proportionately larger increase in profitability due to operating leverage.

The underlying profitability, returns profile and scalability of our GCC business; fast-growing India operations focused on large format hospitals in tier 1 cities pivoted around an asset light model and growing brand equity amongst doctors and patients all give us a unique sustainable platform of profitable growth. Our eyes are set on maintaining an optimal mix of growth and leverage. Margins will witness expansion led by improving maturity mix in the GCC hospitals and clinics, Saudi turnaround and ramp up in India hospitals. As a Company, the focus remains on value creation and making a positive difference in the lives of patients that we serve everyday.”

Aster DM Healthcare is a 30-year-old integrated and comprehensive healthcare service organization. The Company is one of the few entities across the globe providing the complete circle of care from primary, secondary, tertiary to quaternary medical care. These are manned by its 17,691 employees from across the world, delivering on a simple yet strong promise to its people: “We’ll treat you well.”

The Company has the unique distinction of serving people by providing quality healthcare to all segments of the society regardless of their economic or social positioning. In line with this, Dr. Azad Moopen, Founder Chairman and Managing Director at Aster DM Healthcare conceptualized the Company’s three brands - Medcare for the high income, Aster for the middle-income and Access for low-income strata of the population. The Company has an asset light business model wherein the land and civil structure of most of its hospitals are leased. It is also optimally positioned in the Medical tourism sector with a large number of GCC residents visiting India to avail quality and cost-effective healthcare.

Seasonality

Seasonality is unique to GCC businesses and skews the picture significantly for the first and second half-financial year results.

There is a decline in volumes across hospitals, pharmacies and segments during the summer months in the GCC countries. Expats form a major proportion of the population in GCC countries barring Saudi Arabia and during the extreme summer season and school holidays, a large amount of population leave the GCC region. Some doctors also travel back to their home country during this period as well. The impact is visible across industries and reflected particularly more in primary care facilities like clinics and pharmacies.

Segmental Performance

Hospitals

Our Hospital network consists of 9 hospitals in GCC states and 11 multi-specialty hospitals and 9 clinics in India. Our hospitals in India are located in Kochi, Kolhapur, Kozhikode, Kottakkal, Bengaluru, Vijayawada, Guntur, Ongole, Wayanad and Hyderabad and are generally operated under the “Aster”, “MIMS”, “Ramesh” or “Prime” brands.

Revenues increased by 18% to Rs. 897 crore in Q1FY19 from Rs. 763 crore in Q1FY18. EBITDA increased 184% from Rs. 38 crore in Q1FY18 to Rs. 108 crore in Q1FY19. The EBITDA margin was at 12% in Q1FY19 compared to 5% in Q1FY18. This performance was driven by addition of new specialties, services and increase in beds. In-patient count was 51,700+ in Q1FY19 as compared to 47,500+ in Q1FY18 with a growth of 9%. Out-patient visit was 0.73 mn in Q1FY19 as compared to 0.67 mn in Q1FY18 with a growth of 9%.

Clinics

One of the largest and most widespread network of clinics across the Middle East. The Aster DM network has 112 clinics in total with 103 clinics in GCC states and 9 clinics in India.

Clinics have been critical in developing Aster’s brand salience, principally in new locations and geographies. Clinics act as a referral for Aster hospitals. Clinics also crucial for pharmacies and most pharmacies are integrated with clinics, which ensure higher footfalls and faster breakeven. The asset light nature of clinics along with higher return ratios has helped Aster expand its network of clinics rapidly without impacting its balance sheet.

Revenues increased by 11% to Rs. 453 crore in Q1FY19 from Rs. 410 crore in Q1FY18. EBITDA increased 59% from Rs. 34 crore in Q1FY18 to Rs. 54 crore in Q1FY19. The EBITDA margin was at 11.8% in Q1FY19 compared to 8.3% in Q1FY18. This performance was driven by ramp up in new clinics set up in GCC states in the recent past and increase in footfalls from existing clinics.

Pharmacies

We are the largest pharmacy chain in the GCC with 213 retail stores including 180 in UAE, 7, 12, 6, 6 and 2 in Kuwait, Jordan, Qatar, Oman and Bahrain respectively. Healthy probability profile has been maintained by improvement in product mix, dynamic product selection with exclusive tie-ups, in-licensing and favorable deals with pharma companies.

Revenues increased by 20% to Rs. 472 crore in Q1FY19 from Rs. 394 crore in Q1FY18. EBITDA increased 16% from Rs. 25 crore in Q1FY18 to Rs. 29 crore in Q1FY19. The EBITDA margin was at 6.1% in Q1FY19 compared to 6.2% in Q1FY18.

Medical Excellence Highlights

Since inception, Aster DM Healthcare has been in continuous pursuit to push boundaries of excellence in health care and cater to the needs of patients, thereby setting global benchmarks in the field of medicine and patient care. It has accomplished numerous milestones and performed several surgeries that were “firsts”. Mentioned below are some of the significant achievements, in the quarter under review, that are a testament to our clinical excellence:

• Doctors at Aster MIMS in Calicut, Kerala successfully performed their 500th Kidney transplant at the hospital
• The Integrated Liver Care team at Aster Medcity in Kochi, Kerala saved the lives of one-year-old identical twins from liver failure. The fifteen-hour-long complicated transplant surgery was completed successfully making it one of the first such cases of identical twins to undergo simultaneous live liver transplant for acute liver failure in the world
• Doctors at Aster CMI Hospital in Bengaluru successfully performed a TIPS (Transjugular Intrahepatic Portosystemic Shunt) surgery on a 53 year old patient having reverse anatomy of organs (Situs Inversus Totalis), for the 3rd time in the world and 1st time in India. Situs Inversus Totalis, is a condition which involves total reversal of the usual anatomy of organs and is found to occur in about 1 in 10,000-20,000 live births
• Aster CMI Hospital in Bengaluru became the first in Asia to use normothermic machine perfusion to revitalise organs before transplantation in a liver transplant case
• Aster Pharmacy unveiled UAE’s first Eco-friendly pharmacy made with 80% recyclable material
• Doctors at Aster Ramesh Hospitals, Vijaywada, saved a newborn baby with an unclosed hole in aorta or main artery of the heart, also known as patent ductus arteriosus, through stenting
• Doctors at Aster Ramesh Hospital in Vijaywada, in a rare device closure procedure saved a 40-day old baby suffering from severe pulmonary arterial hypertension along with Aortopulmonary window, an uncommon congenital cardiac defect
• A general surgeon at Medcare hospital Sharjah removed the gallbladder of a woman with a rare condition called Situs Inversus where her body organs were located in the ' reverse side’, compared to a normal anatomy
• The surgical Team at Aster Hospital, Mankhool, Dubai recently removed a thyroid gland from a 46- year-old patient which was 20 times larger than its normal size, weighing half-a-kilogram