Financial Data and Key Metrics Changes - The company reported a disappointing quarter with revenue and EBITDA increasing by only 41% on an FX neutral basis [6][7] - Net income was positive for the fifth consecutive quarter, indicating underlying strength despite operational setbacks [12][22] Business Line Data and Key Metrics Changes - Peru's operations outperformed, with a 10% increase in planned memberships and a 19% increase in adjusted EBITDA [14][20] - In Mexico, revenues decreased by 4% and adjusted EBITDA by 5% on an FX neutral basis, attributed to operational setbacks and market softness [15][22] Market Data and Key Metrics Changes - Peru's total capacity utilization increased by 4.4 percentage points year over year, while Mexico and Colombia saw decreases of 0.9 and 2.1 percentage points, respectively [14][15] - Colombia experienced a 5% revenue increase in local currency, driven by risk-sharing models and diversification of the payer portfolio [21] Company Strategy and Development Direction - The company remains committed to transforming healthcare in Spanish-speaking Latin America through a value-based care model, with a focus on high complexity services [28][29] - The strategic direction includes recovering growth momentum in Mexico and expanding oncology capabilities [29][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in Mexico due to the transition to the Auna Way, emphasizing the need for gradual implementation to avoid volume loss [33][41] - The outlook for Colombia is positive, with improved cash flows and a target to increase revenue from risk-sharing models to 30% by mid-next year [36][29] Other Important Information - The company maintained a healthy debt structure and is focused on reducing net debt leverage to a target of three times net debt to EBITDA [27] - CapEx is expected to remain at or below $50 million annually, with ongoing investments in the business [50][57] Q&A Session Summary Question: Update on Mexico's operations and transition to Auna Way - Management clarified that the transition is not a cleanup but a necessary transformation to align physician practices with the Auna Way, which is critical for growth in high complexity services [33][34] Question: Update on Colombia's risk-sharing agreements - Approximately 20% of revenues are now from risk-sharing models, with a target of 30% by the end of the year [36] Question: Details on operations in Mexico - The main source of lost volumes was due to close relationships between suppliers and physicians, but management is seeing early signs of recovery [41][42] Question: CapEx guidance and impairments in Colombia - CapEx is expected to remain consistent, and impairments in Colombia will continue as part of a derisking strategy [50] Question: Effective tax rate outlook - The effective tax rate is expected to stabilize around 38% this year, influenced by intercompany payments and deferred tax benefits [57] Question: Business development expenses in Mexico - Business development expenses were related to upfront payments to doctors and are nonrecurring [59][60] Question: Acceptance timeline for Auna Way in Peru - The acceptance in Peru took several years, while in Mexico, it is expected to be quicker due to lessons learned [61][62]
Auna S.A.(AUNA) - 2025 Q1 - Earnings Call Transcript