Core Insights - Auna S.A. reported a 3% decline in revenues in local currency for Q4 2025 due to soft market conditions in Mexico, but revenues remained flat compared to the previous quarter, indicating stabilization in operations [1][9] - The company is positioned for top-line and EBITDA growth in 2026, supported by a 35% sequential increase in oncology revenues and early signs of recovery in the Out-of-Pocket segment [1][2][9] Revenue Performance - Auna's oncology revenues increased by 35% sequentially, driven by the integration of Opcion Oncologia and the launch of a new Oncocenter at Doctors Hospital [2][9] - Out-of-Pocket segment revenues reached 12% of total Mexico revenues in December, reflecting an 8% increase from Q3 [2] Strategic Initiatives - Auna has implemented actions under new leadership in Mexico to expand its reach into privately insured families and strengthen relationships with physician groups [3] - The company secured favorable tier classifications with leading insurers, which are expected to enhance volumes across key service lines [3] Healthcare Plan and Revenue Diversification - Auna was awarded an extension of an improved healthcare plan for ISSSTELEON, covering state employees in Nuevo Leon [4] - Other initiatives aimed at growing and diversifying revenues with attractive margins are gaining traction [4] Physician Engagement - Approximately 250 physicians, accounting for about 80% of revenues in the hospital network, confirmed improvements in volume and margin, supporting higher productivity and better clinical outcomes [5] Peer Comparisons - Ardent Health's total revenues fell 0.1% year over year to $1.61 million in Q4 2025, while AdaptHealth Corp. reported net revenues of $846.3 million, down 1.2% year over year [6][7] Stock Performance and Valuation - Auna's shares have risen 14.1% over the past three months, contrasting with a 7.6% decline in the industry [8] - The company is trading at a forward price-to-sales (P/S) ratio of 0.28X, lower than its median and industry average [10] Earnings Estimates - Estimates for Auna's earnings show an upward trend, with current quarter estimates at $0.18 and next year estimates at $0.98 [12]

Financial Data and Key Metrics Changes - Consolidated adjusted net income reached PEN 136 million in Q4 2025, compared to PEN 36 million in the same quarter last year, with full-year adjusted net income more than tripling to PEN 336 million [9][10] - Consolidated revenue grew 6% year-over-year in Q4, while adjusted EBITDA declined 14% FX neutral, reflecting Mexico's underperformance and unfavorable comparisons in Colombia [10][19] - For the full year, revenue grew 4%, while EBITDA declined 3% [10][21] - Free cash flow grew 35% to PEN 582 million, and year-end cash position increased 42% to PEN 335 million [27][29] Business Line Data and Key Metrics Changes - Mexico's revenues declined 3% in Q4, but oncology revenues grew 35% compared to the previous quarter, indicating early recovery [11][12] - Peru's revenue increased 11% in Q4, driven by high complexity services and a record low medical loss ratio of 48.5% [16][17] - Colombia's revenue grew 6% in Q4, with a full-year increase of 4%, supported by higher ticket prices [18][19] Market Data and Key Metrics Changes - Capacity utilization in healthcare services decreased by 2.3 percentage points to 64%, particularly in Colombia [10] - Mexico's operations are stabilizing, with early signs of recovery in surgeries and oncology services [31][38] Company Strategy and Development Direction - The company is focusing on expanding its reach in Mexico, particularly among privately insured families, and aligning with physician groups [6][7] - Auna aims to enhance its operational scale in Peru and diversify its revenue streams in Colombia through risk-sharing contracts [8][18] - The company plans to continue investing in strategic growth initiatives, particularly in Mexico and Peru, while managing costs effectively [29][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of Mexico's operations, with expectations for improved volumes and margins in 2026 [31][39] - The company anticipates a 12% increase in adjusted EBITDA and revenue growth of 12% for 2026, supported by disciplined cost management [32][33] Other Important Information - Auna successfully refinanced $825 million in debt, improving its capital structure and reducing interest expenses [9][29] - The company is set to open the Centro Ambulatorio Trecca in 2028, which is expected to significantly contribute to its business in Peru [49][52] Q&A Session All Questions and Answers Question: Can you break down your guidance by region or business line? - Management indicated that Mexico's recovery is expected to drive improvements, but they are not providing specific guidance by country at this time [35][43] Question: What are the risks to your 2026 guidance? - Management highlighted the pace of volume recovery in Mexico and macroeconomic conditions as key variables, but expressed confidence in achieving guidance [40][41] Question: Can you provide updates on the Torre Trecca project? - Management confirmed that Torre Trecca will commence operations in the second semester of 2028 and is expected to represent about 25% of the business in Peru at maturity [51][52] Question: What is the expected CapEx for 2026 and beyond? - Management stated that CapEx for 2026 is expected to be approximately 4% of revenue, focusing on maintenance and IT investments [61][62] Question: How are you planning the ramp-up in occupancy in Mexico? - Management emphasized that occupancy and margins will be managed through a higher mix of complex services, with a clear plan for recovery in 2026 [83][85]

Financial Data and Key Metrics Changes - Consolidated adjusted net income reached PEN 136 million in Q4 2025, compared to PEN 36 million in the same quarter last year, with full-year adjusted net income more than tripling to PEN 336 million [9] - Consolidated revenue grew 6% year-over-year in Q4, while adjusted EBITDA declined 14% FX neutral, reflecting Mexico's underperformance and unfavorable comparisons in Colombia [10] - For the full year, revenue grew 4%, while EBITDA declined 3%, with capacity utilization in healthcare services decreasing 2.3 percentage points to 64% [10][12] Business Line Data and Key Metrics Changes - Mexico's operations stabilized, with oncology revenues growing 35% compared to the previous quarter, although overall revenues in Mexico declined 3% in Q4 [11][12] - Peru's revenue increased 11% in Q4, driven by high complexity services and a record low medical loss ratio of 48.5% [15] - Colombia's revenue grew 6% in Q4, with a full-year increase of 4%, supported by higher ticket prices despite lower volumes [17] Market Data and Key Metrics Changes - Mexico's healthcare market remains soft, affecting surgeries and emergency visits, while Peru continues to outperform with strong pricing and operational scale [6][7] - Colombia's results align with objectives to grow while improving cash flow, with a higher mix of risk-sharing contracts [8] Company Strategy and Development Direction - The company aims to recover growth levels in Mexico and expand its reach into privately insured families, with a focus on integrating new management and initiatives [6][12] - Auna plans to enhance its oncology services and expand its addressable market through projects like the Centro Ambulatorio Trecca in Peru [29] - The company is diversifying away from intermediary payers in Colombia and prioritizing cash flows through risk-sharing arrangements [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the business and the outlook for 2026, citing improvements in Mexico's operations and strong performance in Peru [30][40] - The company expects adjusted EBITDA to increase by 12% FX neutral in 2026, supported by disciplined cost management and strategic growth initiatives [32] Other Important Information - Auna's debt refinancing of $825 million improved its capital structure, reduced interest expenses, and extended maturity profiles [9][28] - Free cash flow grew 35% to PEN 582 million, with a year-end cash position increasing 42% to PEN 335 million, providing funds for strategic investments [26] Q&A Session Questions and Answers Question: Can you break down your guidance by region or business line? - Management indicated that Mexico's recovery is expected to drive improvements, but they are not providing specific guidance by country at this time [34][42] Question: What are the risks to your 2026 guidance? - Management highlighted external factors such as macroeconomic conditions and the pace of volume recovery in Mexico as potential risks, but expressed confidence in achieving guidance [39][40] Question: Can you provide details on the Torre Trecca project? - The Torre Trecca project is expected to commence operations in the second half of 2028, with significant revenue contributions anticipated from the EsSalud partnership [51][52] Question: What is the expected CapEx for 2026? - The expected CapEx for 2026 is approximately 4% of revenue, focusing on maintenance investments and technology upgrades [61] Question: How is the company planning to ramp up occupancy in Mexico? - Management plans to manage occupancy and margins through a higher mix of complex services, aiming for gradual recovery in 2026 [84]

Financial Data and Key Metrics Changes - The company reported a 5% decline in total adjusted EBITDA, primarily due to weaker performance in Mexico [6][9] - Adjusted net income for the quarter was PEN 58 million, with a 1% increase in FX-neutral consolidated revenue driven by Peru and Colombia [9][18] - Capacity utilization decreased by 3 percentage points to 64%, with a 1.5 percentage point increase in Peru offset by declines in Colombia and Mexico [9][10] Business Line Data and Key Metrics Changes - Peru's top line and EBITDA grew by 9% and 15% respectively, driven by an improving healthcare pricing mix and strong insurance MLR [7][18] - Colombia's revenue increased by 5%, supported by risk-sharing models, with adjusted EBITDA rising by 18% [19][18] - Mexico experienced a 12% decline in revenue, although surgery volumes and oncology services showed growth [11][12] Market Data and Key Metrics Changes - Peru accounted for over half of the company's revenues, with a solid growth trajectory [21] - Colombia's revenue share from Nueva EPS decreased from 20% to 13%, indicating successful diversification of payers [19][45] - Mexico's revenue decline was attributed to a slow recovery in volumes and non-operating impacts from system migrations [21][9] Company Strategy and Development Direction - The company aims to enhance its growth in Mexico through a partnership with Sojitz, focusing on co-investment opportunities [32][39] - Auna is committed to maintaining a leverage ratio below three times net debt to EBITDA while pursuing growth initiatives [28][32] - The Trecca project in Peru is expected to generate significant revenue, with a focus on expanding services to state beneficiaries [53][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for a recovery in Mexico in 2026, despite current challenges [8][32] - The company remains focused on improving operational efficiency and expanding its market presence in Peru and Colombia [30][31] - Management highlighted the importance of attracting and retaining healthcare talent in Mexico to drive growth [13][15] Other Important Information - The company successfully refinanced $765 million in debt, improving its debt profile and financial flexibility [27][28] - Auna's cash position at the end of the quarter was PEN 226 million, reflecting a 4.2% decrease from the beginning of the year [26] Q&A Session Summary Question: Could you explain the rationale for expanding in Mexico and how it aligns with your deleveraging goals? - Management emphasized that the partnership with Sojitz will help accelerate growth in Mexico while maintaining leverage targets [39][40] Question: Do you think a change in Colombia's leadership could ease pressures on EPSs? - Management indicated that while political changes may not yield immediate results, there are signs of stabilization in the Colombian healthcare sector [40][41] Question: What key KPIs should be tracked to confirm a recovery in 2026? - Management suggested monitoring occupancy, payer mix, and surgical productivity as indicators of recovery [61] Question: What is the nature of the $500 million investment plan in Mexico? - Management confirmed that the investment plan is related to the MOU with Sojitz and aims to drive significant top-line growth [72] Question: How is Auna managing insurance risk at a group level? - Management explained that risk is managed through continuous repricing and cost containment strategies [75][78] Question: Have the preferred payer network and bundled packages for corporates been launched? - Management confirmed that the preferred payer network has been launched and is continuously evolving [79][80]