Religare Health Trust Results presentation for the quarter ...
Transcript of Religare Health Trust Results presentation for the quarter ...
Disclaimer
This presentation is focused on comparing actual results from the period from 1 April 2014 to 30 June 2014 (“1Q FY15”).
Other than the comparative figures presented, no other comparative figures will be presented as the acquisition of the
Portfolio of RHT as well as listing on the Singapore Stock Exchange was completed on 19 October 2012.
This presentation may contain forward-looking statements that involve risks and uncertainties. Actual future performance,
outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of
risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry
and economic conditions, interest rate trends, cost of capital and capital availability, competition from other developments or
companies, shifts in expected levels of income and occupancy rate, changes in operating expenses (including employee
wages, benefits and training), governmental and public policy changes and the continued availability of financing in the
amounts and the terms necessary to support future business. Investors are cautioned not to place undue reliance on these
forward-looking statements. For further information, please also refer to RHT’s press release which is released in conjunction
with this set of presentation.
The Indian Rupee and Singapore Dollar are defined herein as “₹” and “S$” respectively. Any discrepancy between individual
amounts and total shown in this presentation is due to rounding.
2
RHT yield, gearing and P/B are based on unit price of S$0.905 as at 12 August 2014
Figures for Current Yield of FY15 based on a total number of Common Units of 793,123,944.
*Net Service Fee and Hospital Income excludes straight lining, depreciation and ammortisation
Current Yield (annualised)
8.0%
Gearing ratio, 15.1%
P/B, 1.06
RHT
Q1FY15
Financial Highlights
3
7.8%
9.0%
8.0%
FY13 (annualised) FY14 (actual) FY15 (annualised)
Yield
1Q FY15 Total Revenue and Net Service Fee and Hospital Income were both up 30.0% in SGD against the last quarter
(4Q FY15) DPU remains competitive at 1.80 cents in 1Q FY15 despite the expiry of the Sponsor Waiver An increase of 14.8% in ARPOB in 1QFY15
9.0%
Notes: (1) Exchange rate for actual FY14 was S$ 1 = ₹ 49.62, Exchange rate for annualised FY15 was S$1 = ₹47.81 (2) Includes straight lining of Base Service Fee. Figures for Actual Year 2014 excludes GST. Figures for FY 2015 excludes gain on acquisition of the Mohali CE (3) DPU calculated based on unit price of S$ 0.905 as at 30 June 2014
Revenue (1)(2) (S$m)
106.9
129.8
Distributable Income (1)
(S$m)
97.7
119.8
2.3
7.2
6.9
2.8
Actual Year 2014(annualised)
FY 2015 (annualised)
Service Fee Hospital Income Other Income
46.7
57.4
Actual FY 2014 FY 2015 (annualised)
Clinical Establishment Occupancy for 1Q FY2015
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Clinical Establishment Performance for 1Q FY2015
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87
36
57 54 51 41 35
27 26
99 83
64 65 61 45 44
32 29
Mohali Gurgaon Mulund Noida BG Road Jaipur ShalimarBagh
Kolkata Malar
Revenue (Rs Cr) 1Q FY14 1Q FY15
134%
12% 19%
19%
11% 25%
18%
Source: Fortis presentation slides for 1Q FY15 Revenue figures based on information released by Fortis Healthcare Limited for their Top 10 best performing hospitals in terms of revenue
Average 1QFY14^ 2Q FY14^ 3Q FY14^ 4Q FY14^ 1Q FY15* 4Q FY14 v 1Q FY15 % increase
ARPOB (INR Mn)
10.02 9.93 10.44 10.72 12.31 14.83
Occupancy
78% 86% 78% 73% 74% 1.37
13%
10%
^excluding Gurgaon *including Mohali and Gurgaon
Gurgaon Operational Performance
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• Ranked second in a recent world-wide study of the
‘30 Most Technologically Advanced Hospitals in the
World’ by topmastersinhealthcare.com
• Third largest revenue contributor
• Second highest ARPOB in the Fortis network
• Occupancy ~57% vs ~37% in the corresponding
quarter
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62 68 74 83
1Q FY14 2Q FY14 3Q FY14 4Q FY14 1Q FY15
Revenue (Rs Cr)
Holistic patient care
Exceptional clinical talent
World-class infrastructure
Cutting edge technology
Personalized Service
Source: Fortis 1Q FY15 presentation slides
Current Portfolio for the Quarter ended 30 June 2014
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Hospitals Current Operational Bed Capacity Current Installed Bed Capacity*
Amritsar 153 166
Anandapur, Kolkata 182 373
BG Road, Bengaluru 250 255
Gurgaon 272 450
Faridabad 210 210
Jaipur 233 320
Kalyan, Mumbai 49 52
Malar, Chennai 167 178
Mohali 298 355
Mulund, Mumbai 254 567
Nagarbhavi, Bengaluru 45 62
Noida 191 200
Rajajinagar, Bengaluru 46 52
Shalimar Bagh, New Delhi 200 350
Total 2,550 3,590
*Installed Bed Capacity defined as the maximum number of beds that can be operated at each hospital without any expansion, renovation and/or upgrading of the civil structure of the building, but which may necessitate certain works such as interior, electrical, heat ventilation and air-conditioning works
Ground Breaking Ceremony held on 16 January 2014
Ludhiana BG Road
Estimated Time of Completion
2016 2016
No. of Beds Planned 79 200
Specialities Obstetrics & Gynaecology, IVF services, Cosmetology, Neonatology, Health Checks
Oncology, OT
Current Status Process for government approvals initiated. Demolition works were completed. Groundbreaking Ceremony was held on 16 January 2014.
Process for government approvals initiated.
Estimated Cost S$24 million S$25 million
Development Project Status
9 Cost converted at an exchange rate of S$1 = ₹47.81
Actual 1Q FY14 against 1Q FY15
Actual 1Q FY14
Actual 1Q FY15 Variance Actual 1Q FY14 Actual 1Q
FY15 Variance
S$’000 S$’000 % INR’000 INR’000 %
Total Revenue^ 24,400 31,079 27 1,104,017 1,485,923 35
Net Service and Hospital Income# 16,408 21,924 34 742,401 1,048,222 41
Distributable Income 11,352 14,325 26 - - -
Exchange rate for actual 1Q FY15 was S$ 1 = ₹ 47.81, Exchange rate for actual 4Q FY14 was S$1 = ₹48.53. Exchange rate for actual 1Q FY14 was S$1 = ₹45.25. ^Excludes straight lining and gain on acquisition in connection with the acquisition of Mohali clinical establishment . * Excludes one off stamp duty and gain on acquisition in connection with Mohali establishment.
Actual 4Q FY14 against 1Q FY15
Actual 4Q FY14
Actual 1Q FY15 Variance Actual 4Q FY14 Actual 1Q
FY15 Variance
S$’000 S$’000 % INR’000 INR’000 %
Total Revenue^ 23,468 31,079 32 1,138,883 1,485,923 30
Net Service and Hospital Income# 16,375 21,924 34 773,293 1,048,222 36
Distributable Income 11,413 14,325 26 - - -
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Review of 1Q FY15 Performance
FY 15
Q1 FY14
Q1 Variance S$'000 S$'000 S$'000 Service fee 29,943 25,734 4,209 Hospital income 1,799 1,706 93 Other income 1,612 532 1,080 Total revenue 33,354 27,972 5,382
Total service fee and hospital expenses (18,231) (11,717) (6,514) Finance income 143 342 (199) Finance expenses (1,279) (692) (587) Trustee-Manager fee (2,101) (1,230) (871) Other trust expenses (750) (243) (507)
Foreign exchange loss (197) (1,143) 946 Total expenses (22,415) (14,683) (7,732) Profit before changes in fair value of financial derivatives 10,939 13,289 (2,350)
Fair value gain on financial derivatives (546) 3,326 (3872) Profit Before Taxes 10,393 16,615 (6,222) Taxes (5,420) (3,365) (2055) Net Profit 4,973 13,250 (8,277)
Financial Results for 1Q FY15
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Income Statement For the quarter ended 30 June 2014
Converted at an exchange rate of S$1 = ₹47.81 for 1Q FY15. Exchange rate for actual 1Q FY14 was S$1 = ₹45.25.
Financial Results for 1Q FY15
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Reconciliation to Unitholders Distribution
FY 15
Q1 FY 14
Q1 Variance S$'000 S$'000 S$'000 Net profit for the period attributable to unitholders of the Trust 4,973 13,250 (8,275) Distribution Adjustments: Impact of non-cash Straight Lining (1,092) (3,131) 2,039 Technology Renewal Fee (169) (166) (3) Depreciation and Amortisation 3,939 3,726 213 Amortisation of debt arrangement fee 151 130 21 Trustee-Manager Fees payable in Units 1,341 644 697
Foreign exchange differences (1,104)
(3,090) 1,986 Capital expenditure (224) - (224) Deferred Tax 1,895 - 1,895
Transaction cost capital in nature 5,559 - 5,559
Gain on acquisition – Mohali Clinical Establishment (904) - (904)
Unrealized gain on financial asset (40) (11) (29) Total distributable income attributable to the unitholders of the Trust 14,325 11,352 2,973
Income Statement For the quarter ended 30 June 2014
Converted at an exchange rate of S$1 = ₹47.81 for 1Q FY15. Exchange rate for actual 1Q FY14 was S$1 = ₹45.25.
Balance Sheet
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(S$'000) 30-Jun-14 31-Mar-14Intangibles 133,768 135,501 PPE 726,857 676,070 Other Long term Assets 49,396 46,449 Long Term Liabilities (228,076) (166,121) Net Current Assets (1,961) 13,336 Total Net Assets attributable to Unit Holders
679,984 705,235
As at 30 June 2014
Converted at an exchange rate of S$1 = ₹48.19 for 30 June 2014. Exchange rate for 31 March 2014 was S$1 = ₹47.73.
Particulars Minimum Hedging (percentage to total exposure)
Indian rupee-denominated cashflows received from India 100% (on one year forward basis)
RHT has hedged the following foreign exchange exposures
Contracted rate Settlement
INR 53.19 to SGD 1 Dec-14
INR 51.38 to SGD 1 Jun-15
Forward contracts already entered
Hedging – Foreign Currency Exposure
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Average contracted rate INR 52.28 to SGD 1
Gearing remains low with ample headroom for future growth opportunities
^Based on financial statements of RHT Group as of 30 June 2014
Post-acquisition of the Mohali CE
Actual^ (S$ millions)
122.06
Debt Headroom (without credit rating) to 40%
Current Gearing: 15.1%
Headroom of approximately
S$ 337.95 million
Debt Headroom (with credit rating) to 60%
Headroom of approximately
S$907.94million
Ample Debt Headroom
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Source: Miraqle
Name Open Close Change %
Religare Health Trust 0.845 0.925 9.47
Ascendas India Trust 0.77 0.835 8.44
Parkway Life REIT 2.43 2.36 (2.88)
First REIT 1.075 1.185 10.23
FTSE ST All-Share Index - Real Estate Investment Trusts REIT 720.18 766.61 6.45
Unit Price Performance
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For the period 1 April 2014 to 30 June 2014
90%
95%
100%
105%
110%
115%
01 Apr 14 10 Apr 14 22 Apr 14 02 May 14 14 May 14 23 May 14 03 Jun 14 12 Jun 14 23 Jun 14
RHT FTSE- REIT First REIT Plife REIT AIT
Comparative Analysis – Financial Analysis
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5.9% 4.9% 7.0% 8.0%
22.0%
35.3% 32.9%
15.1%
1.38 1.48
1.27
1.06
AIT Plife First Reit RHT
Yield Gearing ratio P/B
Yield figures as at 29 July 2014 (OCBC Investment Research Weekly SREITs),
RHT figures based on actual numbers, annualised yield and using share price of $0.905 as at 12 August 2014.
Gearing figures for First Reit, Ascendas India Trust and Parkway Life Reit are based on their respective presentation slides and press releases.
Awards & Accolades
Jaipur CE - Six Sigma Healthcare Excellence Awards – 2013 ‘Best Hospital in Patient Care, Best Hospital in Patient Safety and Best Hospital in Quality Initiatives
Anandpur CE - No. 2 Best Hospital in Multi-specialty category in Kolkata in a survey conducted by AC Nielson for The Week Magazine
BG Road CE - Joint Commission International (JCI) accreditation - Awarded the JCI accreditation for the 3rd term in a row in May 2014 - No. 4 on 2013 World’s Best Hospitals list for Medical Tourists - Recognized for the 4th consecutive year by the Medical Travel
Quality Alliance (MTQUA)
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Awards & Accolades
Mulund CE - JCI Accreditation - Stars of the Industry Healthcare Leadership Award (Patient Safety) - FICCI Healthcare Award (Operational Excellence) - FICCI ‘Special Jury Recognition Award’ - Won 3 awards at the prestigious Asian Hospital Management Awards,
2014 in categories of ‘Human Resources’ and ‘Patient Safety’
Mohali CE - JCI Accreditation - Won ‘Best Multispecialty Hospital (Non Metro)’ Award
during the first edition of “Doc N Doc Gammex Saviour Awards”
Gurgaon CE - Recognized as a Green Building and received a 4 Star rating by
TERI GRIHA (Green Rating for Integrating Habitat Assessment) - No. 2 globally on ‘30 Most Technologically Advanced Hospitals in
the World’ by ‘topmastersinhealthcare.com’
Shalimar Bagh CE - Received a 3 Star rating by TERI GRIHA
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: RHT Clinical Establishments : Greenfield Clinical Establishments : Operating Hospitals
Notes: (1) No. of beds and installed capacities as of March 31, 2014. Potential bed capacity assumes all planned phases of
development and construction are completed in respect of the Greenfield Clinical Establishments (2) Independently valued by DTZ in INR as at March 31, 2014 (except for Mohali as at March 20, 2014) based on S$1
= INR 47.73. Valuation of operating assets based on DCF and Hospital and Medical Services Agreements (“HMSAs”) as relevant; valuation of greenfield assets based on Market Value.
Portfolio valued at S$857m (1)(2)
12 RHT Clinical Establishments (S$822m)
4 Greenfield Clinical Establishments ($29m)
2 hospitals managed and operated by RHT ($5m)
Approximately 3.6 million sq ft of built-up area across 10 states
Sizeable Population Catchment
Located Close to Major Transportation Nodes
400 Potential Bed Capacity
Amritsar
Ludhiana
153 Operational Beds 166 Installed Bed Capacity
79 Potential Bed Capacity
Faridabad
Gurgaon
Jaipur 233 Operational Beds 320 Installed Bed Capacity
210 Operational Beds 210 Installed Bed Capacity
272 Operational Bed Capacity 450 Installed Bed Capacity
Mumbai, Mulund
Mumbai, Kalyan
254 Operational Beds 567 Installed Bed Capacity
49 Operational Beds 52 Installed Capacity
250 Operational Beds 255 Installed Bed Capacity
Bengaluru, BG Road
Bengaluru, Nagarbhavi 45 Operational Beds 62 Installed Bed Capacity
Bengaluru, Rajajinagar 46 Operational Beds 52 Installed Bed Capacity
Chennai, Malar
Chennai
167 Operational Beds 178 Installed Bed Capacity
45 Potential Bed Capacity
Hyderabad
Noida
Kolkata
New Delhi, Shalimar Bagh
182 Operational Beds 373 Installed Bed Capacity
191 Operational Beds 200 Installed Bed Capacity
200 Operational Beds 350 Installed Bed Capacity
Greater Noida 350 Potential Bed Capacity
Mohali 298 Operational Beds 355 Installed Bed Capacity
18 Quality Assets Geographically Diversified Across India
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200 Potential Bed Capacity
Fortis – A Stronger Balance Sheet
25
Sale of international assets in 2013
Australia- Dental Corp for AUD 270 million
Vietnam- Hoan My Medical Medical Corp for US$80 million
Hong Kong- Quality Healthcare for US$355 million
Public Issue of Foreign Currency Convertible Bonds (FCCBs)
Issue of US$30 million listed on Singapore Exchange Ltd (SGX)
International Financial Corporation (IFC)
Invested a total of US$100 million through a mix of preferential allotment and FCCBs
Preferential Allotment of Equity Shares – Standard Chartered
3.7 million equity shares to Standard Chartered Pvt Equity Mauritius III (SCPE)
US$5.5 million raised
Gearing
Net Debt-to-Equity ratio stands at 0.21 (1Q FY15) vs 0.70 (1Q FY14)1
1 Source: Fortis Q1 FY15 Presentation Slides
• 0.5% - 1.0% of acquisition price
• 0.5% of the sale price (Divestment to 3rd party)
• No divestment fee (Divestment to
Sponsor)
Performance based management fees designed to align Management’s interests with Unitholders
Base fee Performance fee Acquisition / divestment fee
• 0.4% p.a. of the value of the Trust Property
• 50% to be paid in Units
• 4.5% p.a. of Distributable Income
• 50% to be paid in Units
• 2.0% of total development project costs • Payable in the form of cash and/ or units
Development fee Asset management fee
• 1.0% of gross revenue • Paid quarterly in arrears • No asset management fee paid for assets
operated by Sponsor
Fee Structure
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27
Income Secured Through Long Term Agreements
Term of Agreement
15 years with option to extend by another 15 years by mutual consent
Primary Obligations of HSCos
Making available and maintaining the Clinical Establishments
Provision of outpatient services
Provision of radio diagnostic services
Primary Obligations of FOCs
Provision of healthcare services at the Clinical Establishments
Pay to RHT the Services Fees and Commitment Deposits
Services Fee
Base Service Fee – Increased by 3% p.a. – Upward revision for any capex / expansion – Provision for capex to replace medical equipment
(“Technology Renewal Fee”) added to Base Fee (2)
– RHT entitled to request for an advance of up to 60% of the Base Service Fee
Variable Service Fee – 7.5% of the operating income of Fortis
Commitment Deposits
Fortis to pay to RHT 25% of cost for expansions of capacity / modification of Fortis Hospitals as an interest free refundable commitment deposit
A
B
C
D
Key Terms of the HMSA
Prior to listing, the Hospital Services Companies (“HSCos”) will enter into Hospital and Medical Services Agreements (“HMSAs”) with the Fortis Operating Companies (“FOCs” ) to operate the healthcare infrastructure assets (1).
A
B
C
D
Public
Efficient Trust Structure
28
Note: (1) Including Fortis Healthcare International which owns 28% of RHT.