AUNA — Auna S.A.

AUNA Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Consolidated Revenue: Grew 6% year-over-year in Q4, with a full-year increase of 4%.
• Adjusted EBITDA: Decreased 14% in Q4 and 3% for the full year, attributed mainly to underperformance in Mexico.
• Adjusted Net Income: Reached PEN 136 million in Q4 (up from PEN 36 million YoY) and PEN 336 million for the full year (more than tripled).
• Leverage Ratio: Maintained at 3.6x despite a $825 million debt refinancing that improved maturity profile and reduced interest expenses.
• Free Cash Flow: Increased by 35% to PEN 582 million, with cash position up 42% to PEN 335 million.

2. Strategic Updates and Business Highlights

• Mexico Operations: Stabilization efforts are underway with a new management team focusing on expanding into privately insured families and aligning with physician groups. Early signs of recovery include increased oncology revenues and improved physician engagement.
• Peru Performance: Continued to outperform with an 11% revenue increase in Q4, driven by high complexity services and a record low medical loss ratio.
• Colombia: Results aligned with objectives, focusing on cash flow improvement through risk-sharing contracts and reducing reliance on intervened payors.
• Torre Trecca Project: A significant public-private partnership to refurbish and operate a high-complexity outpatient facility in Lima, expected to serve 3 million patients, with operations commencing in H2 2028.

3. Forward Guidance and Outlook

• 2026 Expectations: AUNA anticipates a 12% increase in both revenue and adjusted EBITDA, supported by disciplined cost management and strategic investments.
• CapEx: Expected to remain around 4% of revenue, focusing on maintenance and IT investments.
• Market Conditions: Management expresses confidence in the recovery of Mexico's operations and overall business stability, with expected improvements in occupancy and margins.

4. Bad News, Challenges, or Points of Concern

• Mexico's Underperformance: Despite stabilization, Q4 results were disappointing due to earlier volume losses and ongoing challenges with physician and supplier relationships.
• Declining EBITDA Margins: The overall adjusted EBITDA margin contracted, particularly in Mexico, due to service mix and previous healthcare plan costs.
• Impairment Losses: Higher impairment losses in trade receivables noted in both Colombia and Peru, although management expects improvements in 2026.

5. Notable Q&A Insights

• Guidance Breakdown: Analysts inquired about growth expectations by region, with management indicating that Mexico's recovery is crucial for overall improvement.
• Torre Trecca Details: Management confirmed it will represent 20-25% of Peru's business at maturity, with predictable revenues and minimal capital risk due to reimbursement structures.
• Debt Structure: Post-refinancing, the all-in cost of debt has decreased to approximately 11.5%, enhancing financial flexibility.
• Share Buyback Discussion: While the Board has considered share buybacks, the focus remains on growth opportunities, particularly in Mexico, rather than immediate buyback programs.

Overall, AUNA is positioned for recovery in 2026, particularly in Mexico, while continuing to leverage strong performance in Peru and Colombia. However, challenges remain, particularly in managing operational performance and financial metrics in Mexico.