Auna Announces 1Q24 Financial Results

Rhea-AI Summary

Auna (NYSE: AUNA), a major player in Latin America's healthcare sector, announced its unaudited 1Q24 financial results. Revenue increased by 20% YoY to S/1,076 million, and operating profit rose by 26% to S/182 million. Adjusted EBITDA grew 14% YoY to S/241 million with a margin of 22.4%, though it decreased by 1.2 percentage points YoY. Net income improved to S/22 million from a break-even position in 1Q23.

Geographically, revenue growth was observed across all markets. In Peru, the adjusted EBITDA margin reached 20.4%, aligning with targets. Significant investments are being made in Mexico, particularly in Monterrey and the upcoming OncoMexico launch, expected to bolster returns in the latter half of 2024. The company forecasts adjusted EBITDA growth of 20% or more for the full year. The leverage ratio improved to 4.29x.

These financial results reflect Auna's integrated healthcare model's strength and its ability to generate substantial returns, emphasizing the company's commitment to modernizing healthcare in the region.

Positive

• Revenue increased 20% YoY to S/1,076 million.
• Operating profit rose by 26% YoY to S/182 million.
• Adjusted EBITDA grew by 14% YoY to S/241 million with a margin of 22.4%.
• Net income improved to S/22 million from breakeven in 1Q23.
• Peru's adjusted EBITDA margin met the target of 20.4%.
• Significant investments in Mexico expected to strengthen returns in late 2024.
• Leverage ratio improved to 4.29x from 4.80x YoY.
• Healthcare services revenue saw 38% growth in Colombia and 14% in Mexico.

Negative

• Adjusted EBITDA margin decreased by 1.2 percentage points YoY.
• SG&A expenses rose by 29% YoY to S/244 million.
• Revenue per patient decreased by 12% YoY.
• Plan memberships fell by 3% YoY.

Financial Analyst

Auna's financial results for 1Q24 show a 20% YoY increase in revenue to S/1,076 million, accompanied by a 26% increase in operating profit to S/182 million. The company's Adjusted EBITDA margin at 22.4% is slightly down YoY but has shown improvement quarter-over-quarter (1.5 p.p.).

This growth is driven by expansion in all geographic markets, indicating effective strategy execution and potential for continued growth in revenue and profitability. However, the slight decrease in EBITDA margin could signal rising operational costs or inefficiencies that need to be managed.

Investors should take note of the leverage ratio, which has improved to 4.29x from 4.46x QoQ and 4.80x YoY. This indicates a better financial position and reduced financial risk, albeit the ratio remains relatively high, implying significant debt levels that may affect future profitability and cash flow.

Overall, Auna's performance shows robust growth, but investors should be cautious of the high leverage and slight margin contraction.

Market Research Analyst

The healthcare sector in Latin America is experiencing significant transformation and Auna's performance highlights its ability to capitalize on this trend. The company's focus on integrating its operations across Mexico, Colombia and Peru positions it well to leverage cross-market synergies and drive long-term growth.

The growth in Peru's EBITDA to 20% is particularly noteworthy, demonstrating the effectiveness of Auna's business model in this market. The expansion efforts in Mexico, including the planned launch of OncoMexico, indicate strategic investments aimed at capturing growing demand in a high-potential market.

However, it's important to monitor the competitive landscape and regulatory environment, which can significantly impact Auna's growth prospects. The company's guidance for 20% growth in Adjusted EBITDA for FY24 suggests confidence in its strategy but also highlights the importance of maintaining operational efficiency and managing costs effectively.

For retail investors, Auna represents a growth opportunity in the healthcare sector with a strong market positioning, though it's essential to consider the potential risks associated with high leverage and market-specific challenges.

Medical Research Analyst

Auna's focus on expanding its high-complexity services, particularly in Monterrey, underscores its commitment to providing advanced healthcare solutions. The planned launch of OncoMexico later this year is a strategic move to leverage the nationwide insurance license and extensive distribution network acquired through Dentegra. This can significantly enhance Auna's market presence in oncology services, a critical area of healthcare.

The increase in adjusted EBITDA in Monterrey by 34% QoQ in local currency indicates effective integration and utilization of acquired assets. This suggests a strong potential for future growth in this market as capacity utilization improves and high-complexity services expand.

From a healthcare perspective, Auna's strategy of integrating horizontally and vertically across regions enhances its ability to deliver comprehensive and efficient care. However, the success of this strategy will depend on continued investment in technology and talent, as well as navigating diverse regulatory landscapes.

Investors should recognize the long-term value potential in Auna's integrated approach to healthcare while being mindful of execution risks and market dynamics.

 Revenue increases 20% YoY to S/1,076 million, with operating profit increasing 26% to S/182 million

Adjusted EBITDA margin of 20.4% in Peruvian operations

LUXEMBOURG--(BUSINESS WIRE)-- Auna (NYSE: AUNA) (“Auna” or the “Company”), one of the largest and most recognized company in Latin America’s healthcare industry with operations in Mexico, Colombia and Peru, today announced unaudited financial results for the three months ended March 31, 2024 (“first quarter 2024” or “1Q24”).

Financial results are expressed in Peruvian Soles (“S/” or PEN”) and are presented in accordance with International Financial Reporting Standards (“IFRS”), unless otherwise noted. Figures in US dollars (US$ or USD) for 1Q24 are presented for indicative purposes and were calculated using an FX rate of US$1= S/3.718. All comparisons in this announcement are year-over-year (“YoY”), unless otherwise noted; additionally, results are presented in an FX neutral basis (“FXN”) for consolidated revenues, consolidated cost of sales and services, consolidated selling and administrative expenses and consolidated adjusted EBITDA, as well as, in local currency for the Mexico and Colombia segments, to eliminate the effect of foreign exchange, or “FX,” volatility between the comparison periods.

Financial results are preliminary and subject to year-end audit and adjustments.

1Q24 Consolidated Financial Highlights

• Consolidated Revenue increased 20% YoY to S/1,076 million driven by growth across all geographic markets
• Gross Profit of S/414 million, up 26% YoY
• Operating Profit of S/182 million, up 26% YoY
• Adjusted EBITDA increased 14% YoY to S/241 million
• Adjusted EBITDA Margin of 22.4%, down 1.2 p.p. YoY, but up 1.5. p.p. QoQ
• Adjusted Net Income increased to S/22 million, up from breakeven in 1Q23
• Leverage ratio improved 0.17x QoQ and 0.52x YoY to 4.29x

Message from Auna’s Executive Chairman and President

“Guided by strong leadership in our clinical, technology and business teams across Auna, our regional, horizontally and vertically integrated healthcare platform delivered strong results in the first quarter. Our 20% consolidated revenue growth was the main driver of the 26% YoY increase in our operating profit and 14% increase in Adjusted EBITDA.

Importantly, Peru reached our target Adjusted EBITDA of 20%. As our continued success in Peru makes clear, we are capable of generating substantial returns as our capacity utilization rises. This strengthens our conviction in Mexico, where we are committed to deploying the same integrated business model. Accordingly, we continue to invest in bringing our operations in Monterrey up to AunaWay standards and in hiring top talent, both essential to expanding our high-complexity services and ramping up capacity utilization in Monterrey’s fast-growing market. Our recent performance at our OCA network in Monterrey is encouraging, with Adjusted EBITDA increasing 34% versus Q423 in local currency. We are also investing in the planned launch of OncoMexico later this year, with the intention of fully leveraging the nationwide insurance license and extensive distribution network that we gained through the acquisition of Dentegra last year.

As we continue to build our capabilities in Mexico, we expect returns to strengthen in the latter half of the year, giving us the ability to improve our financial position by reducing absolute debt levels and our leverage ratio.

To expand on our outlook for the remainder of 2024, we expect Adjusted EBITDA to increase 20% or more versus 2023. We remain confident in our ability to disrupt, modernize and integrate healthcare in Spanish Speaking Latin America, delivering strong value creation for Auna’s stakeholders. Of course, that would not be possible without the many doctors, nurses, technicians, managers and other colleagues dedicated to our mission of transforming healthcare in the region.”

Key Financial and Operating Metrics
(Figures in millions of Soles and millions of US Dollars, unless expressed otherwise)

*Revenues include intercompany revenues
		1Q'24 (USD)									Δ 1Q'24 vs
Key Financial Metrics				1Q'24		4Q'23		1Q'23			4Q'23		1Q'23
Healthcare Services Mexico		83		308		284		271			9	%	14	%
Healthcare Services Colombia		94		349		335		252			4	%	38	%
Healthcare Services Peru & Oncosalud		113		419		402		371			4	%	13	%
Healthcare Services Peru		65		241		225		212			7	%	14	%
Oncosalud		68		253		244		221			4	%	15	%
Holding and Eliminations		(20	)	(76	)	(67	)	(62	)		13	%	22	%
Total Revenue		289		1,076		1,021		894			5	%	20	%
Cost of sales and services		(178	)	(662	)	(645	)	(566	)		3	%	17	%
Gross Profit		111		414		376		328			10	%	26	%
Gross Margin				38.5	%	36.8	%	36.7	%		1.6 p.p.		1.8 p.p.
SG&A		(66	)	(244	)	(235	)	(190	)		4	%	29	%
Operating Profit		49		182		130		145			40	%	26	%
Operating Margin				16.9	%	12.7	%	16.2	%		4.2 p.p.		0.7 p.p.
Net Finance costs		(45	)	(168	)	(302	)	(122	)		-44	%	38	%
Net Income (Loss)		(2	)	(8	)	(219	)	0
Healthcare Services Mexico		28		104		82		113			26	%	-8	%
Healthcare Services Colombia		13		50		58		36			-14	%	40	%
HC Serv. Peru & Oncosalud		24		85		72		61			19	%	40	%
Healthcare Services Peru		10		37		17		22			113	%	70	%
Oncosalud		13		48		55		39			-12	%	24	%
Holding & Eliminations		1		2		1		2
Adjusted EBITDA		65		241		213		211			13	%	14	%
Adjusted EBITDA Margin				22.4	%	20.9	%	23.6	%		1.5 p.p.		-1.2 p.p.
Leverage Ratio				4.29x		4.46x		4.80x			-0.17x		-0.52x
Adjusted Net Income (Loss)		6		22		(6	)	1
Basic and Diluted Earnings per Share				(0.28	)	(4.81	)	(0.09	)
Adjusted Basic and Diluted Earnings per Share				0.36		(0.08	)	(0.08	)
Key Operating Metrics
Healthcare Services
Total bed capacity				2,199		2,199		2,192			0	%	0	%
Occupancy (total capacity)				65	%	64	%	63	%		1.3 p.p.		2.5 p.p.
Average revenue per patient		787		2,928		3,317		2,374			-12	%	23	%
Healthcare Plans
Plan memberships				1,237		1,271		1,171			-3	%	6	%
Average monthly revenue per plan member		16.0		59.3		58.3		57.6			2	%	3	%
MLR				55.1	%	53.8	%	53.3	%		1.3 p.p.		1.8 p.p.
Oncological Plans				51.5	%	50.6	%	52.1	%		0.9 p.p.		-0.6 p.p.

2024 Financial Guidance

Guidance: For full-year 2024, the Company expects consolidated Adjusted EBITDA to increase at least 20% YoY on an FX-neutral basis.

Assumptions: Auna′s guidance is based on management’s current performance outlook and expected macroeconomic and regulatory conditions in the three countries where the Company operates. Any changes in these conditions could have an impact on the guidance provided.

Disclaimer: The 2024 financial guidance reflects management’s current assumptions regarding numerous evolving factors that are difficult to accurately predict, including those discussed in the Risk Factors set forth in the Company’s Form F-1 filed with the United States Securities and Exchange Commission (the “SEC”). Reconciliations of forward-looking non-IFRS measures, specifically the 2024 EBITDA guidance, to the relevant forward-looking IFRS measures are not being provided, as the Company does not currently have sufficient data to accurately estimate the variables and individual adjustments for such guidance and reconciliations. Due to this uncertainty, the Company cannot reconcile projected EBITDA to projected net income without unreasonable effort. The 2024 financial guidance constitutes forward-looking statements. For more information, see the “Forward-Looking Statements” section in this release.

For a full version of AUNA’s First Quarter 2024 Earnings Release, please visit: https://aunainvestors.com/1q24-earnings-report

Conference Call Details

When: 5:00 p.m. Eastern time, May 22nd, 2024

Who: Mr. Suso Zamora, Executive Chairman of the Board and President
Mrs. Gisele Remy, Chief Financial Officer and Executive Vice President
Miss Ana Maria Mora, Head of Investor Relations

Dial-in: +1 888 596 4144 (U.S. domestic), +1 646 968 2525 (International)
Passcode: 3884034

To access Auna′s financial results call via telephone, callers need to press # to be connected to an operator.

Webcast: click here

Safe Harbor Statement

This press release contains forward-looking statements. Forward-looking statements convey our current expectations or forecasts of future events. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to differ materially from the forward-looking statements that we make. Forward-looking statements typically are identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” ”estimate,” “intend,” “project,” “plan,” “believe,” “potential,” “continue,” “is/are likely to,”or other similar expressions. Forward-looking statements that appear in a number of places in this press release include, but are not limited to, statements regarding the intent, belief or current expectations, regarding various matters, including, our expected 2024 Adjusted EBITDA growth, the expected impact on revenues and profitability of certain initiatives we are pursuing in Mexico and our target leverage level. Any or all of our forward-looking statements in this press release may turn out to be inaccurate. Our actual results could differ materially from those contained in forward-looking statements due to a number of factors.

The forward-looking statements in this press release represent our expectations and forecasts as of the date of this press release. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this press release. For a discussion of the risks facing the Company which could affect whether these forward-looking statements are realized, see our Form F-1 filing with the U.S. Securities and Exchange Commission.

About AUNA

Auna is a Latin American healthcare company with operations in Mexico, Peru and Colombia, prioritizing prevention and concentrating on high complexity diseases that contribute the most to healthcare expenditures. Our mission is to transform healthcare by providing access to a highly integrated healthcare offering in the underpenetrated markets of Spanish Speaking Americas. Founded in 1989, Auna has built one of Latin America′s largest modern healthcare platforms that consists of a horizontally integrated network of healthcare facilities and a vertically integrated portfolio of oncological plans and selected general healthcare plans. As of March 31st, 2024, Auna’s network included 31 healthcare network facilities, consisting of hospitals, outpatient, prevention and wellness facilities with a total of 2,308 beds, and 1.3 million healthcare plans.

For more information visit www.aunainvestors.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20240522306193/en/

IR Contact

Email: contact@aunainvestors.com

Source: Auna S.A.

FAQ

What was Auna's revenue in 1Q24?

Auna's revenue in 1Q24 was S/1,076 million, a 20% increase YoY.

How much did Auna's operating profit increase in 1Q24?

Auna's operating profit increased by 26% YoY to S/182 million in 1Q24.

What is Auna's adjusted EBITDA for 1Q24?

Auna's adjusted EBITDA for 1Q24 is S/241 million, a 14% increase YoY.

What was Auna's adjusted net income in 1Q24?

Auna's adjusted net income in 1Q24 was S/22 million, up from breakeven in 1Q23.

What is Auna's leverage ratio as of 1Q24?

Auna's leverage ratio improved to 4.29x in 1Q24.

How did Auna's EBITDA margin change in 1Q24?

Auna's adjusted EBITDA margin decreased by 1.2 percentage points YoY to 22.4%.

How did Auna's SG&A expenses change in 1Q24?

Auna's SG&A expenses increased by 29% YoY to S/244 million in 1Q24.

What growth did Auna's healthcare services see in Colombia in 1Q24?

Auna's healthcare services revenue in Colombia grew by 38% YoY in 1Q24.

What investments is Auna making in Mexico?

Auna is investing in Monterrey operations and the planned launch of OncoMexico, expected to enhance returns in late 2024.

What are Auna's financial expectations for 2024?

Auna expects its adjusted EBITDA to increase by at least 20% YoY in 2024 on an FX-neutral basis.