Apollo posts heavy loss for six months

Lanka Hospitals Corporation Limited (LHCL), owners of the Apollo Hospital which recently changed ownership, has reported a sharp loss of Rs.34.5 million for the six months to September 2006 against a marginal profit of Rs.1.8 million in the same 2005 period.

LHCL’s majority stake was acquired by business tycoon Harry Jayawardene-led Sri Lanka Insurance acquired from its Indian owners recently. Apollo recently agreed to continue a management contract with the new owners following a visit to India by Jayawardene.

Stock market analysts said that the loss was mainly driven by a significant decline in ‘other income’ of the company, which stood at Rs.4.6 million for the period ended September 2005 and fell to Rs.1.4 million.

“An increase of finance charges by 18 percent to Rs.99 million from a lower Rs.84 million recorded during the year 2005 was the major source of the loss incurred by the hospital,” an analyst said.

He added that despite posting a loss of Rs.34.5 million, the company’s EBITDA (Earnings before interest, tax, Depreciation and Amortisation) stood at Rs.132.1 million, indicating the impact of ‘Depreciation and Finance Charges’ of the company. The hospital has a long term borrowing, which amounts to Rs.371 million apart from the debentures of Rs.200 million.

He said that short term loans (including overdrafts) have risen to Rs.313 million as at 30th September 2006 compared to Rs.292 million a year earlier.

He added that despite the notable loss, the company’s revenue has risen by five percent, while the gross profit has increased by six percent.