Fortis is going through a severe cash crunch at the moment. The company's debt was downgraded by rating agencies and borrowing more money hasn't been easy
Fortis Healthcare, the beleaguered healthcare provider, is scheduled to report Q4 and FY18 results today after deferring it twice.
The company postponed the financial results citing need for additional time to consider certain aspects of the Luthra & Luthra’s internal investigation report in its financial accounts.
The Q4 and FY18 results were initially slated for May 30, but were later postponed to June 11, before getting deferred again.
The delay in results also had an impact on timelines of bidding process. Fortis has now extended the date for submission of bids to June 28, from the earlier June 14.
So, what can be expected from Fortis results?
Financial positionInvestors will get some clarity on the financials of the company.
Revenues for the nine-months ended December 2017 stood at Rs 3,474 crore versus Rs 3,450 crore in 9MFY17, while the company recorded net loss of Rs 77 crore in the same period against Rs 490 crore profit in 9MFY17. The EBITDA margins have contracted from to 14.8 percent in 9MFY18 from 17 percent in 9MFY17.
The company's problems come at a time when the sector is going through challenging environment over several months primarily on account of the government's intervention to regulate prices.
Fortis is going through a severe cash crunch at the moment. The company's debt was downgraded by rating agencies and borrowing more money hasn't been easy.
Fortis statutory auditor Deloitte had raised several red flags about ongoing investigations, inter-corporate loans and recoverability of certain vendor advances, in the auditor review report accompanying the company's earnings statements for the September and December quarters.
Auditors have pointed out that nearly Rs 470 crore was siphoned-off through questionable corporate deposit transactions by Fortis' erstwhile promoters.
Moneycontrol earlier reported that it’s actually the statutory auditor who held from signing Fortis Q4 accounts for want of more information related to certain finding in Luthra & Luthra report.
It's interesting to see the comments of statutory auditor in Q4 review of accounts.
Luthra & Luthra investigation
The company's board in March appointed external legal firm Luthra & Luthra to investigate whether there are any breaches in the company's internal control procedures in light of the promoters taking out nearly Rs 473 crore.
Luthra & Luthra submitted its report to the board on June 8. Fortis' board did not disclose any details of the internal investigation report, but said it had shared the findings of Luthra & Luthra with the statutory auditors.
Analysts are waiting to see whether there any new skeletons in the cupboard.Shares of Fortis gained 1.91 percent and were trading at Rs 141.55 on BSE at 10.50 am, while the benchmark Sensex declined 0.16 percent to 35,632.83 points.The Great Diwali Discount!
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