• FX Neutral EBITDA Growth: 20% growth target for 2024 achieved.
• Q4 FX Neutral Adjusted Growth: 28% with margin expanding 3.1 percentage points year-over-year.
• Revenue: Grew 11% on an FX neutral basis to approximately PEN1.1 billion in Q4; full year revenue nearly PEN4.4 billion, up 12% from 2023.
• Capacity Utilization: Increased 2.6 percentage points to 66%.
• Plan Memberships in Peru: Increased 7.4% for health plans; oncology memberships up 1.6%.
• Oncology MLR: Decreased 0.7 percentage points to 53%.
• Debt Leverage: Reduced to 3.6 times at year-end.
• Net Income: PEN124 million for the year, a PEN338 million improvement from a PEN214 million net loss in 2023.
• Mexico Revenue Growth: 9% increase in Q4; adjusted EBITDA up 30% in local currency.
• Peru Revenue Growth: 10% increase in Q4; adjusted EBITDA up 33% for the quarter and 51% for the year.
• Colombia Revenue Growth: 14% increase in local currency in Q4; adjusted EBITDA up 23% in local currency.
• Adjusted Net Income: PEN36 million in Q4, up from PEN6 million in Q4 2023.
• Cash Position: Improved to PEN236 million at year-end, an 18% sequential increase.
• Free Cash Flow: PEN432 million generated in 2024; organic free cash flow PEN509 million, up 18% from 2023.
• Interest Paid: PEN503 million, down 19% from 2023.

• Warning! GuruFocus has detected 4 Warning Signs with AUNA.

Release Date: March 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Auna SA (NYSE:AUNA) achieved a 20% FX neutral EBITDA growth target for 2024, demonstrating strong financial performance.
• The company reported a 28% FX neutral adjusted growth in the fourth quarter, with margin expansion of 3.1 percentage points versus last year's quarter.
• Auna SA (NYSE:AUNA) successfully signed a five-year exclusivity agreement with leading oncologists in Monterrey, positioning itself as a key oncology player in the region.
• The company's debt leverage fell to 3.6 times at year-end, indicating improved financial stability.
• Auna SA (NYSE:AUNA) reported a net income of PEN124 million for the year, a significant improvement from a net loss of PEN214 million in 2023.

Negative Points

• Challenges remain in Colombia, with additional provisions impacting financial results and a cautious approach being taken to limit risk exposure.
• The healthcare system in Colombia is under stress, affecting Auna SA (NYSE:AUNA)'s operations and requiring a conservative approach to growth.
• Seasonality effects in Mexico and Peru lead to variations in surgical volumes, impacting quarterly performance.
• The company faces uncertainty in Colombia due to government interventions and payer issues, affecting revenue predictability.
• Auna SA (NYSE:AUNA) is not providing specific guidance for 2025 due to uncertainties in the Colombian market, impacting investor confidence.

Q & A Highlights

Q: Can you explain the seasonality in health services in Mexico and Peru, and discuss the demand in Monterrey? A: Jesus Leon, Executive Chairman, explained that seasonality affects volumes, with slower periods at the end of the year and in January due to holidays and summer in the southern hemisphere. In Monterrey, Auna is working with insurers and employers to expand the market and focus on high complexity services, aiming to partner with insurers for increased policyholder volumes.

Q: What is the expected growth by geography for 2025, and what are the company's liability management plans? A: Jesus Leon noted that Mexico is expected to be a top growth market due to high complexity services, while Colombia may remain flat due to external factors. Gisele Remy, CFO, mentioned that the company refinanced its 2025 bonds and is evaluating refinancing alternatives to improve its credit profile.

Q: Could you discuss the commercial strategy and outlook for OncoSalud in 2025, and provide an update on Colombia's risk-sharing models? A: Jesus Leon stated that OncoSalud will continue to adjust pricing based on medical inflation and expand with new insurance plans. In Colombia, risk-sharing models are being expanded, offering predictable revenue and improved cash conversion cycles.

Q: What are the plans for network expansion in Peru and Mexico, particularly in Mexico City and Guadalajara? A: Jesus Leon mentioned potential capacity expansions in Peru by 2027, while in Mexico, Auna is establishing agreements in Guadalajara and Mexico City to deliver services and expand its footprint, aiming for a national presence.

Q: Can you provide more details on the oncology agreement in Monterrey and the phasing out of services in Colombia? A: Jesus Leon explained that the agreement with Monterrey oncologists could lead to Auna capturing 30% of the oncology market there. In Colombia, services with Nueva IPS are being phased out, with a focus on risk-sharing models to ensure cash flow stability.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.