June 25, 2008

Apollo Hospital’s turnover crosses Rs 1,000-cr mark

Apollo Hospitals Enterprise Ltd achieved a turnover of Rs 1,150 crore for 2007-08, crossing the Rs 1,000-crore mark for the first time in its history.

Turnover for the year was up 28 per cent, over the previous year’s Rs 899 crore. Net profit was flat at Rs 100 crore, but the net profit for the previous year included a Rs 32-crore profit on the sale of the company’s hospital in Sri Lanka.

At a press conference today, the company’s Director-Finance, Ms Sunita Reddy, said that Apollo intends to spend Rs 1,400 crore over the next 18 to 24 months on various hospital projects across the country. Many of the projects are on, and the company has so far spent Rs 120 crore of the budgeted capex spends.

These include a 500-bed hospital in Hyderabad, a 150-bed one in Chennai, and two hospitals of 220 beds each at Visakhapatnam and Bhubhaneshwar.

As regards funding, Ms Reddy said that the company had recently raised Rs 400 crore through the private equity route. The promoters, by converting warrants issued earlier, would bring in another Rs 160 crore. Another Rs 200 crore would come from internal accruals. Rest of the capex would be debt-funded, she said. She said that the company might also go in for external commercial borrowings to raise debt.

Shorter stay

Speaking about Apollo Hospitals’ performance last year, she said that the company had been able to bring down the average duration of hospital stay of patients from 6 days to 5 days.

This is significant because hospitals make money in the first four days of a patient’s stay in the hospitals — through scans, tests and surgeries. After four days, the patient is recuperating and the “revenue intensity” of the stay goes down — the patient is just paying room rent.

For a 500-bed hospital, if the average stay comes down by a fifth, it is the equivalent of adding another 100 beds, without having to invest additionally in infrastructure, Mr K. Padmanabhan, Group President, Apollo Hospitals, said.

Also, last year, the company went aggressively on adding standalone pharmacies.

It added 262, taking the total number of standalone pharmacies to 612.

This was “EBIT negative” by Rs 88 crore, because a standalone pharmacy typically becomes cash-positive after 12 months. On an average, a standalone pharmacy turns over Rs 36 lakh each year.

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