Shalby Hospitals Generates Positive EBITDAR Margin Within 3 Years of Its Operations
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Earnings Presentation Q1 FY2021 SHALBY LIMITED (BSE CODE: 540797 I SHALBY, NSE CODE: SHALBY) A leader in Joint Replacement surgeries in India with an established chain of multi-specialty tertiary care hospitals. CONTENT 01 Q1 FY2021 PERFORMANCE HIGHLIGHTS 02 HOSPITAL BUSINESS UPDATE 03 SHALBY BUSINESS MODEL 04 ANNUAL PERFORMANCE HIGHLIGHTS 2 Q1 FY2021 PERFORMANCE HIGHLIGHTS Q1 FY2021 PERFORMANCE HIGHLIGHTS Q1 FY2021 performance impacted due to the Covid-19 crisis Lower patient count, number of surgeries and bed occupancy impacted financial performance In Patient Count (Nos.) Surgeries Count 3,664 843 Revenues Operating EBITDA 9,799 in Q1 FY20 6,146 in Q1 FY20 Rs. 408 mn Rs. (25) mn Beds Occupied (Nos.) Avg. Occupancy Rate Q1 FY20 Rs. 1,340 mn Q1 FY20 Rs. 314 mn 205 17% 457 In Q1 FY20 38% in Q1 FY20 PBT Net Profit Rs. (126) mn Rs. (86) mn ARPOB (Rs.) ALOS (Days) Q1 FY20 Rs. 210 mn Q1 FY20 Rs. 237 mn 21,848 5.10 Rs. 32,228 in Q1 FY20 4.24 in Q1 FY20 Notes: 1. Occupancy rate is on the basis of operational beds 2. ALOS is excluding Day Care 3. All numbers are on Standalone basis 4 Q1 FY2021 PERFORMANCE HIGHLIGHTS Commenting on performance Chairman & Managing Director Shalby Group Structure Simplification Dr. Vikram Shah Said: Step 1 As expected our first quarter FY 2021 financial performance was • Shalby Ltd acquired 100% of Slaney from significantly impacted by the pandemic primarily because Shalby’s Zodiac Mediquip specialization in orthopedics, and in particular arthroplasty, has not • Cash consideration of Rs. 11.21 million been a high priority treatment area for patients during these times. However, many of these arthroplasty surgeries will simply be postponed Step 2 to a later date when the overall environment for personal safety and travel improves. • Shalby International acquired 5% of Griffin Our ongoing diversification strategy into multi specialty hospitals has also continued to from Yogeshwar serve general and COVID-19 patients well across the Shalby hospital group. Up to the • Cash consideration of Rs. 1.04 million end June, close to 600 Covid-19 patients have been treated at our 6 hospitals. As a management team, we have always focused on both initial hospital For both transactions development capex and ongoing operating costs. This long term view and practical • Kotak and Kotak retained as financial advisor approach has helped us during these difficult times, as doctor costs as a percentage • Beeline Broking Ltd acted as merchant banker of revenues has declined in FY20 and our hospital modular design layouts have and provided an independent valuation minimized costs further. Our current hospital developments in Nashik and Santa Cruz report will be impacted from a timing perspective but the safety of the Shalby team and our working partners is our highest priority. Capital Structure As we advance through this current quarter, occupancy rates improved significantly with July and August registering 35% and 36% respectively. The recovery in the number Rs Million June-20 Mar-20 of arthroplasty surgeries is slow but we expect it to reach pre-Covid levels by end of next quarter. Our cautious approach to leverage has now proved beneficial by providing Shalby with a robust balance sheet during these challenging times. I would Gross Borrowings 494 622 also like to take this opportunity to thank the Shalby management and other team members for their outstanding professionalism and commitment during the course of Cash and Investments 982 1,021 the last few months. Net Debt/ (Net Cash) (488) (398) In recognition of this current scenario, Dr Darshini Shah and I will not be taking any fees for services for all of FY2021. Equity 8,046 8,137 Notes: 5 1. All numbers are on Standalone basis Q1 FY2021 PERFORMANCE HIGHLIGHTS Total Revenue (Rs. Mn) EBITDA (Rs. Mn) and Margin 314 1,340 301 1,279 1,232 1,160 243 23.4% 23.6% 19.7% 129 11.1% 408 (25) Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 PBT (Rs. Mn) and Margin PAT (Rs. Mn) and Margin 210 199 17.7% 139 10.1% 15.6% 15.6% 6.7% 11.2% 1.9% 237 22 129 83 (169) (86) (126) Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Note: 1. All numbers are on Standalone basis 6 Q1 FY2021 PERFORMANCE HIGHLIGHTS In Patients Day Care Out Patients 10,682 87,575 9,799 9,838 6,356 6,726 83,187 80,501 8,711 5,701 74,333 4,945 3,763 3,664 32,305 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 ARPOB (Rs.) Surgery Count 32,228 31,253 29,399 29,356 6,146 4,985 4,738 21,848 3,966 843 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 7 Q1 FY2021 PERFORMANCE HIGHLIGHTS Revenue Mix by Care % of Revenue from Arthroplasty 52% 42% 43% 42% 12% 12% 13% 13% 16% 83% 82% 82% 83% 77% 12% Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 In Patient Day Care Out Patient Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 No of Bed Occupied Occupancy Rate ALOS 473 457 456 5.10 408 38% 39% 38% 34% 4.26 4.26 4.24 4.07 205 17% Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Notes: 1. Occupancy rate is on the basis of operational beds 2. ALOS is excluding Day Care 3. All numbers are on Standalone basis 8 Q1 FY2021 PERFORMANCE HIGHLIGHTS Revenue by Hospital Specialty 52% 27% 15% 14% 12% 10% 9% 9% 8% 6% 7% 8% 7% 7% 4% 5% Arthroplasty Critical Care & Orthopaedic Cardiac Science Nephrology Oncology Neurology Others General Medicine Q1 FY20 Q1 FY21 Number of Surgeries by Specialty Revenues by End Patient 60% 55% 18% Arthoplasty 50% 46% 26% Orthopedic 16% 40% 2% Nephrology 30% 3% Surgery 3% General Surgery 30% Q1 FY20 Mix 21% 21% 21% 5% 53% Cosmetic & Plastic Surgery 5% (Nos.) 20% Q1 FY21 7% Oncology 1% 28% 10% 4% 11% Cardiac Science 3% 2% Others 0% 13% Self Pay Corporate Third Party Corporate 5% Insurance Government Administrator Private Q1FY 21 Q1FY 20 Note: 1. All numbers are on Standalone basis 9 Q1 FY2021 PERFORMANCE HIGHLIGHTS Total Operating Expenses (Rs. Mn) Total Costs Mix (Rs. Mn) D&A Expenses 1,027 1,031 977 988 8% 9% 8% 8% 17% 7% 9% 9% 15% Other Expenses 15% 15% 15% 14% 2% 2% 5% 14% 433 2% 17% Employee Benefit Expenses 2% Purchase and Change in 68% 66% 63% 60% 50% Inventory Operative and Other Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Expenses Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Doctor Costs as % Consumables as Other Operative Expense Employee Costs of Revenue from Operations % of Revenue from Operations as % of Revenue from Operations as % of Revenue from Operations 28.9% 30.3% 25.6% 25.1% 24.1% 25.6% 22.5% 23.1% 22.9% 21.1% 20.0% 17.5% 15.2% 12.7% 13.1% 13.3% 9.1% 9.5% 9.4% 9.5% Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q1 FY21 Rs. 116 mn vs Rs. 338 mn Q1 FY20 Q1 FY21 Rs. 77 mn vs Rs. 296 mn Q1 FY20 Q1 FY21 Rs. 67 mn vs Rs. 119 mn Q1 FY20 Q1 FY21 Rs. 88 mn vs Rs. 168 mn Q1 FY20 Notes: 1. Total Operating Expenses comprises of Operative and other expenses, Purchase and Change in Inventory, Employee costs and Other Expenses 2. All numbers are on Standalone basis 10 Q1 FY2021 PERFORMANCE HIGHLIGHTS Particulars (in Rs. Million) Q1 FY21 Q1 FY20 Q4 FY20 FY 20 FY 19 YoY Growth Revenue from Operations 384 1,318 1,055 4,839 4,624 4.6% Other Income 24 23 105 177 94 89.4% Total Income 408 1,340 1,160 5,016 4,718 6.3% Expenses COGS 272 777 698 2,931 2,839 3.2% % of Revenue 71% 59% 66% 61% 61% Employee Benefit Expenses 88 168 161 652 643 1.4% % of Revenue 23% 13% 15% 13% 14% Other expenses 74 82 172 440 317 38.8% % of Revenue 19% 6% 16% 9% 7% Total Operating Expenses 434 1,027 1,032 4,025 3,801 5.9% % of Revenue 113% 78% 98% 83% 82% EBITDA (25) 314 129 992 918 8.1% EBITDA Margins % (6.2)% 23.4% 11.1% 19.8% 19.5% Depreciation and Amortisation 89 89 90 359 330 8.7% Finance Cost 12 15 17 64 81 (21.2)% PBT (126) 210 22 570 507 12.4% Total tax (40) (27) 191 291 186 56.0% Effective Tax Rate % 31.5% (12.8)% nm 51.0% 36.7% PAT (86) 237 (169) 280 321 (12.9)% PAT Margins % (21.2)% 17.7% (14.5)% 5.6% 6.8% Notes: 1. Margins are calculated on the basis of Total Income 2.