How do you value the first semester of the year regarding the results obtained by Atrys Health?
We have had a very positive first semester, which reflects the solidity and sustained growth of our different business areas. The business figure has experienced an increase of 7.8% compared to the same period of the previous year, mainly driven by the Oncology and Diagnostic divisions, which have shown an acceleration in growth, due to the strong demand for the services we provide.
This growth has also translated into an improvement in financial results in general terms. While the exploitation result of the first semester of last year was negative at 5 million euros, this year we have registered a positive result of 1 million. In addition, the exercise result has significantly reduced our losses, with a 43%decrease.
In the first half of the previous year we lost 16 million, while this year these have been reduced to 9.4 million. The tendency of the different magnitudes is positive, highlighting not only financial recovery, but also the solid growth of our business. The strong demand for our services continues to show very good behavior, which leaves us very satisfied.
Income reached 115.8 million euros. What factors have allowed this evolution?
That’s right, the growth of our income has been mainly reflected by our three business areas: oncology, diagnosis and prevention. In particular, Oncology has experienced a very significant growth of 16.9%, driven by the strong demand for medical oncology services. In Spain, chemoimmourapherapy treatments have increased by 21%, while in Mexico, where we started medical oncology operations a couple of years ago, growth has been 36%.
Additionally, it should be noted that in Julio we opened a radiotherapy center at the Valdebebas hospital in Madrid. This investment will begin to be reflected in greater contribution to growth during the second semester.
For its part, the diagnostic division has also shown robust growth, close to 10%, driven by pathology and genetic laboratories. We have registered a very prominent increase in HPV diagnoses and positive growth in nuclear medicine in Spain, where we already have licenses to initiate high -precision treatments, such as therapy, an innovative procedure that reduces side effects in the treatment of cancer.
In the telemedicine area, income has grown by 6%, although Chile has shown less growth. This is due to our strategy to prioritize more profitable customers, discontinuing those who did not meet profitability standards, which explains that certain markets have maintained flat.
In summary, robust growth has focused mainly on medical oncology, especially in Spain and Mexico, as well as genetics and pathology laboratories.
All business areas have presented growth, especially the Oncology area. What weight is estimated in each of the areas in the coming months?
Currently, the Oncology division represents 31% of our income, while diagnosis weighs 30.4% and prevention, the most mature division, represents 38.6%.
Comparing with last year, Oncology represented 28%, so it is clearly the area that has grown the most and will continue to gain weight in the coming months, probably adding two or three additional points in next year.
Diagnosis has also increased its participation, from 29.9%to 30.4%, and it is expected that in the next year it will remain around 30-32%.
For its part, prevention has slightly reduced its weight, from 41.7% to 38.6%, because it is a more mature business that does not grow at the same pace as oncology or diagnosis. This makes its relative participation within the company’s income mix decreases, although it remains an important part of the business.
The gross margin on sales has fallen to 63.7%. Why this descent and what measures will they carry out to stabilize that margin?
The decrease in the gross margin has a structural part. The prevention division, which is the most mature and with the greatest margin – 92%cerrum – has reduced its weight, while areas such as oncology, which grow faster but have minor gross margins – in the case of medical oncology, between 30 and 35% – they are gaining weight. This change in the composition of our business areas generates a mix effect that reduces the global gross margin.
However, all areas are improving their margins individually. The exception is the medical cancer part in Spain, where we have seen that the gross margin of the first semester fell from 34% to 27%. This is mainly due to the increase in the cost of drugs, especially with the introduction of more expensive new generation medications and the increase in the number of patients. This is a recurring effect that usually occurs every year. To mitigate this impact, we renegotiate rates with our clients retrospectively, which allows us to recover part of that margin.
Structurally, there is an increase in costs in medical oncology in Spain. We cannot assure that we will recover all margin reduction, but we do hope to recover a part. In addition, this effect has also been reinforced by the growth of almost 17% in Oncology, which has included the incorporation of new contracts with long -term medical insurers and large volume, which, in the negotiation, present gross margins lower than those of other contracts that the company already had.
Telemedicine is key to a company like Athris. What percentage of income currently occupies and what are the growth forecasts?
Telemedicine represents about 20% of our income. This year, growth has been approximately 6%, mainly affected by slowing in Chile and our strategy to focus on more profitable customers, discontinuing those that did not reach the required levels of profitability.
It is an area with a strong demand: in Spain we are seeing a very important interest, and the same happens in Colombia and Brazil. We consider that, once the client portfolio is stabilized and prioritizing profitability, this business has the capacity to grow between 10% and 15% per year.
They have announced possible divestments. What kind of projects could be included in this area?
We are carrying out an analysis work to identify which business areas are the most mature and which may not have a competitive positioning as robust as others. We also seek to determine the most appropriate time to disinvert and thus maximize value.
This work is to decide which areas could be less attractive or generate less long -term value for our shareholders. The idea is to make divestments that allow us to reduce debt, reduce financial load and generate greater cash flows, which can then be reinvested in those areas where we have strong leadership or competitive positions, with high growth potential.
We are doing a strategic review of the entire portfolio of the company to make these decisions at the most appropriate time, with the aim of maximizing the value of sales, reducing the financial structure and accelerating the creation of value for our shareholders.
What are the main opportunities or projects that will play a key role for growth?
Medical oncology is one of the most important areas for our growth. Currently, we provide these services in Spain, where we have a clear leadership position. In Mexico, we started offering tracts of chemoimmunotherapy two years ago and today it is already the second country with the highest business volume in Latin America. This year we have begun to introduce medical oncology in other countries in the region, where we see a very high potential.
The services in Brazil, Chile and probably Colombia in the second semester are in the initial phase, but we already perceive a high demand for medical oncology treatments that is not fully covered, which makes Latin America a region of great opportunity and growth. This will be one of the main engines of our expansion.
In addition, we are seeing the possibility of introducing other business areas, as a diagnosis, in Latin American countries where we were not yet present. For example, in Chile, last year we began with a diagnosis of pathology, and until then we only offered telemedicine; The results are being very positive.
And in Mexico, where we still do not offer telemedicine, we see very interesting opportunities. We are evaluating the best way to implement it that we are successfully lending in other Latin American countries.