Q4 2020 New Frontier Health Corp Earnings Call

Good day everyone and welcome to the New Frontier Health corporations fourth quarter and fiscal year 2020 earnings conference call. Please note that today's call is being recorded. I would now like to turn the conference over to mister bills Emma off our please go ahead.

Thank you operator. Hello, everyone and welcome to New Frontier Health fourth quarter and fiscal 2020 earnings conference call the company's earnings results were released earlier today and are available on the company's website at ww.w. In addition remarks today will be accompanied by a presentation, which can also be found on the company's website.

Before we continue please note that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the private Securities litigation Reform Act of 1995 for looking statements involve risks and uncertainties as such the company's results may be materially different from the views expressed today further information regarding these and other risks and uncertainties is included in the company's form 20 a month with the Securities and Exchange Commission and other documents filed with the New Frontier does not assume any obligation to update any forward-looking statements except as required under applicable law. This Presley's also includes Financial managers that are not calculated in accordance with International financial reporting standards as you buy the International Accounting Standards sport for reconciliation of these measures in the most compelling calculated in accordance with IFRS. Please see that earnings release or investor presentation published by new friends here help today and file with the SEC on form 6-k.

Now, please allow me to introduce the management team on the call today Miss Roberta Lipson Chief Executive Officer of nfh Mister Carl Wu president of nfh and chairman of the executive committee of the board will provide updates for the quarter following Management's prepared remarks. We will open up the call to questions during the Q&A session and mr. Walter Schutte the Chief Financial Officer of nfh and Mister David song see if operating officer at benefits will also be available to answer questions, but that said I would now like to turn the call over to Roberta Roberta, please go ahead.

Hello, and good day everybody and thank you Bill. We're pleased to have you join us for a discussion of our fourth quarter and fiscal 2020 results twenty-twenty with challenging for us and others around the world with the pandemic implementing impacting all loss of life on the macroeconomy. We're pleased to see the Panthers substantially brought under control. They despise the roll out of the vaccine. We continue to see recovery in revenue and are hopeful will experience increases our chances of moving forward as well. Now turn the call over the call will provide details about our financial performance for the fourth quarter and supposed to school year off, please go ahead. Thank you. For those of you following along with our presentation deck. Please refer to page six and seven or snapshots of the quarter and the dead

For the fourth quarter of 2020 Revenue continue to recover having increased by 4.4% from the prior quarter to six hundred fifty-four million. R&B gave me for the school year twenty-twenty a client like 7.7% year-on-year due to the reduction patient Podium and the number of procedures performed during COVID-19 to damage especially true with regards to patient volume throughout the past year. We demonstrated strong resilience and Agility as well as the commitment to invest in Technologies facilities, and people thanks to the tremendous strength and the determination of like our entire team. We managed to navigate the pandemic in the shift and smooth manner off with macro economic recovery in life returning to normal in China. We continue to see positive trend not business of this quality in Q4 total outpatient volume and inpatient phone number.

And we call it a 1.2% and 7.4% increase from the prior 2 quarters respectively. However, looking at the volume data total impatient at Michigan an outpatient admissions with 17.3% and 19.5% lower than last year's level respectively. This is mainly due to lower admission in the obstetrics Department to use applications like local trade in 2020 and lower admission in the pediatric department to our ages facility as schools remain closed and hands personal hygiene and protective of schoolchildren the internet.

In addition to 4 outpatient and inpatient ASD increased by 14% And 15.1% respectively as a result of an increase in the number of higher security services offered at our facilities that's list and Services report form to to the condemning for four years twenty twenty outpatient and inpatient wage increased by 11% and 15% respectively. Thank you for that utilization decrease 34.8% compared to 40.1% in June 2019 due to lower inpatient admission during the COVID-19 demek for the full year twenty-twenty that is libation rate decreased 33.3% off from City and point three percent juices some of the week.

The revenue breaks down.

As a result of the top that new from our tier one facilities and the associated clinics increased by 4.4% in Q4 2020 compared to 3 primarily damage to steady growth in various Specialties such as Family Medicine Internal Medicine surgery and also. However physical 2020 revenue from wage Kia one facility and Associated clinics decreased by 11.9% year-on-year due to an overall Decline and patience holding for the year as a result COVID-19 as well obstetrics, Revenue due to low birth rate in 2020 and lower revenue from Pediatrics, you know.

Similar to Kiawah facility experience at 3.2% growth in Q4 compared to that refuses to the gradual recovery of patience holding off increasing the amount for non emergency medical services as compared to the prior quarter, but physical twenty-twenty revenue from here to our facilities and other aspects as a group across 15.8%. 15.6% year-on-year Define and they should go as a result of COVID-19 and a decrease in the amount for Pediatric and obstetric services back to the planet and so the extension at the given increased recognition and new patient up ticket at USA and presume facility to for revenue bloxburg is a good increase by 5.4% quarter-over-quarter and for fiscal 2020 increased by $29 3% year-over-year.

AJ's talk about revenue recovery as you can see this by episodes of Cobra that break out during the last two courses and 2020. We have recovered to growth. However, the client PM Pediatrics and patiently holding continue to direct on our regular recovery. So even changing engine. Our bills are heavily exposed to those two agents with you. Yeah, so you're not yet fully recovered. You can even drink you for thank you accurately and Q4 regarding just the tax which isn't paged 11 and the fog adjusted ebitda increased by 252.1% year-over-year increase was primarily attributable to revenue recovery and the ongoing implementation is costing messages as well as strong Revenue rental, extension.

For fiscal 2020 adjusted ebitda increase by 61% over yet further Hospital continues to be that positive since May I please put the latest recovery you believe they go well for the longer-term growth of our business. Now I tend to call back to Alberta or latest development home for the case. Go ahead. This is a difficult situation with process. I'd like to introduce our new Women's and Children's Hospital, please turn the slice 13 a new facility is the United family genes a Women's and Children's Hospital recently completed construction how the completion ceremony on March 27th and will begin. Arrangements in the coming week the hockey game.

So is the first level?

And credited specialty hospitals in the USA Network with over twenty five thousand square meters of changed. The facility is conveniently located near Beijing Olympic Village this direct access to Major services with the capacity of more than two hundred days. The hospital is expected to provide Outpatient Clinic Services, a 24/7 pediatric emergency services in patient care and neonatal intensive care services to provide best quality Medical Services. We received a number Journal clinical talents record Specialties, including obstetrics Gynecology Pediatrics Rehabilitation and family package to complement are confirmed internal staff transfer plans from other u s u s h disorders in Beijing.

Service is offered that beautiful facility will include a full range of authentic illogical and obstetric services including us specialization in various areas of life and children help. The medical team will be less. I got from the old way that OBGYN medical team is led by doctor Ireland and the paediatric team will be life after you took who have many decades of leadership and clinical experience in their respective Fields moving on 2/12. You'll see updates on the BJP Beijing building while the separation from last quarter as mentioned the lease on building one of the Beijing campus first began in nineteen, ninety six and what you need in 2016. The second lease expired on December 31st, 2020. However, we have a temporary arrangement in place to continue using Bill dead.

Period of time Provisions are underway for potential my renewal with plans for certain existing operations to be relocated to existing among families satellite clinics as well as other United Family facilities in Beijing the majority of the clinic located two building two on the same campus wage as well. As some movies street from commercial space adjacent to the hospital lawsuit inpatient maternity rooms, as a result of the relocation will be supplemented wage in the newly-opened United Family King Day women and children facility now, I'll turn the call back to Carlo again who share more details about the going private proposal costume. Go ahead. Thank you a little busy. I'd like to keep it brief update on the preliminary non-binding going private proposal.

8:10 to 5:15 on February 10th, 2021 received a preliminary findings proposal from a group of investors. I mean to acquire all outstanding leadership and then you go in private transaction for us $12 per share and cash proposed transaction result in nsh becoming a privately held company and be listings. It's causing the issue from the New York Stock Exchange on February 10th, 2021. We further Inland nfh received a clarification from Los Tigres representative and indicating that the fireproof intend to the later time and in connection with the proposed transaction also proposed to acquire all out any more money to purchase air Mauritius company, not already beneficiary on by members of the group or the CD's must 1820 the new one from birth.

special committee to review and evaluate the aforementioned

Ann Marie non-binding going private Proposal with the support of seven title.

This concludes I'll pretend to be operated. We are now ready for questions. Thank you. Will that be conducting a question-and-answer session. If you'd like to ask a question, please press one from your telephone keypad, and the confirmation tonal indicate. Your line is in the question queue. You may press start to if you would like to remove your question from the Q4 positions that are using speaker equipment. It may be necessary to bring your handset before pressing the star Keys. One moment, please. So we pull for questions.

Thank you. Our first question comes from the line of Jason Liu with Credit Suisse, please just you with your questions.

Hi there. Thanks for taking my questions and congrats on a strong fourth-quarter in a flight twenty results. I have two questions regarding 2021 as well as potential guidance office questions on expenses for twenty twenty twenty four twenty Twenty-One. And I was wondering if company would be would be given guidance and as well what other guidance can be given across operating and expansion assets and then in addition regarding expansion assets for 20 21, can we expect to see and it just sit you get that break even or um, a positive thoughts in 20 21 for expansion assets and then regarding some of the expenses we see that for fourth-quarter for the SWV expenses has gone down quite considerably month going forward. Do we expect some of these fourth-quarter expenses to remain the same into twenty Twenty-One or do we see some of these expenses to be more temporary and Thursday?

Swb expenses could go back up and then in addition regarding the system supplies expenses. We seen that that has gone up as well in fourth-quarter. Do we expect this to be maintained going forward in 2012 as well? Those are my questions. Thank you.

Maybe I can take the first question. You got it guidance. We we are not putting out a full year guidance. And then let's of the going private process thoughts. And so the given uncertainty few remaining to Century particularly around the statue of recovering also rep. The decision previously leased have not put out who your guidance in any case in the choir responding to button light of the puzzle who you want to do the internet independent evaluation and typical for our company going to talk about guidance and 241 of benefits including salary reductions. They are temporary in nature dead.

That will be resulted in 20 21. The reservation has been complete.

Yeah, I'm going to fix that definitely included in between the Q3 next to your phone number.

Got it, and then for supplies expenses do we see that to be maintained as a higher ratio going forward due to the increase in higher quality or higher complexity as well?

So I think there was a mix changes as a result that actually generally speaking you said Thursday at 5. So generally speaking supplies link to revenue go up with others for example vaccine PTR and so probably and also as we bought a supply a more complex Services some of the the consumable Collectibles are also quite expensive but still are the revenues resulting from so it will be a mix but I don't think it's the complex services that so much raised the the supply ratio, but yep.

Exactly and texting each each release of consumable given the need for action, but I think that will see that a $10 a year as cold as calm down calm down as well. I think I think you're referring to page Seventeen. I think in the Q3 results. We also had broken down by Specialties. I think Parts is increases in supplies and materials usage has extensive Revenue was also the result that the growth in the number of segments including our surgical Specialties. We're typically that would be more consumable. So so I think it's a percentage of Revenue increased slightly compared to the private prior year.

Got it. Thank you. That's very helpful. I'll jump back into Q. Thank you.

Thank you. As a reminder. You may press star one to ask a question at this time.

Thank you at this time. I was hearing a call back to management for closing remarks.

There are no further questions at this time, but I'll turn it full blast manager for closing remarks.

Okay. Thank you very much everybody for joining the call. We look forward to talking to you again next quarter.

Thank you. This will conclude today's conference. You may disconnect your lines at this time. We thank you for your participation.