Auna (NYSE:AUNA) held its first-quarter earnings conference call on Wednesday. Below is the complete transcript from the call.
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The full earnings call is available at https://events.q4inc.com/attendee/288424677
Summary
Auna reported a 10% revenue growth in the first quarter of 2026, though adjusted EBITDA decreased by 5% due to revenue adjustments and payroll increases.
The company stabilized its hospital platforms in Mexico and Colombia, and expanded higher complexity services in Peru, contributing to strong cash flow and growth momentum.
Auna reaffirmed its annual revenue and EBITDA guidance, expecting stronger growth in the second half of the year driven by improved service utilization and strategic initiatives.
Operational highlights include a 19% quarter-over-quarter increase in adjusted EBITDA in Mexico and a 13% revenue growth in Colombia, with a focus on risk-sharing agreements for predictable cash flow.
Management emphasized efforts to streamline operations and improve billing cycles, particularly in Peru, to mitigate penalties and enhance revenue predictability.
Full Transcript
OPERATOR
Good morning and welcome to Auna first quarter 2026 earnings conference call. My name is Rob and I will be your operator for today’s call. At this time all participants are in listen only mode and please note that this call is being recorded. There will be an opportunity for you to ask questions at the end of today’s presentation. Now I would like to turn the call over to Anna Maria Mora, Head of Investor Relations. Ma’am. Please go ahead.
Anna Maria Mora (Head of Investor Relations)
Thank you operator hello everyone and welcome to Auna’s conference call to review our first quarter results. Please note that there is a webcast presentation to accompany the discussion during this call. If you need a copy of the presentation, please go to our Investor Relations website or contact Auna’s Investor Relations team. Please note that when we discuss variances we will be doing so on a year over year basis and in FX neutral or local currency terms with regard to Mexico and Colombia. Unless we note otherwise, let’s move to slide 2. In addition to reporting on audited financial results in accordance with International Financial Reporting Standards, we will discuss certain non IFRS financial measures and operating metrics, including foreign exchange neutral calculations. Investors should carefully read the definitions of these measures, the metrics and reconciliations included in our earnings press release published yesterday after market close to ensure that they understand them. Non-IFRS financial measures and operating metrics should not be considered in isolation as a substitute for or superior to IFRS financial measures and are provided as supplemental information only before we begin our remarks. Please also note that certain statements made during the course of today’s discussion may constitute forward looking statements which are based on management’s current expectations and beliefs and which are subject to a number of risks and uncertainties that could cause actual results to materially differ, including factors that may be beyond the company’s control. This includes, but are not limited to our target leverage ratio. Suppliers and Information Systems in Mexico the results of the key initiatives we are implementing in Mexico, Colombia and Peru the expected capacity and market of Torres Treca once built the execution of our strategic plan including the recovery of our growth level and the rollout of the Auna Way in Mexico our planned investments, our expected revenue growth and adjusted EBITDA growth, our revenue and adjusted EBITDA guidance and the creation of further growth and sustainable value for all stakeholders. For a description of risks that may impact our forward looking statements, please refer to our Form 20F filing with the U.S. securities and Exchange Commission and our earnings press release. Slide 3 please on today’s call we have Suzo Zamora, our Executive Chairman and President Giselle Remi, our Chief Financial Officer and Executive Vice President, and Lorenzo Massart, our Executive Vice President of Strategy and Equity Capital Markets. They will discuss AWNA’s consolidated and segment financial and operating results for the first quarter as well as provide an update on our various strategic growth initiatives. After that, we will open the call for your questions. Tulsa, please. Go ahead.
Suzo Zamora (Executive Chairman and President)
Thanks Annie. Let’s move to slide 4 please. We got off to a good start in 2026 building commercial momentum across our regional healthcare platform, accelerating growth and generating strong cash flows. We have stabilized and restored growth in Auna’s Mexico hospital platform. We have strengthened Auna’s Colombia hospital platform by expanding our unique risk sharing businesses and deepening our relationships with the country’s largest and best capitalized payers. We continue to grow revenues from Auna Peru’s hospital platform by further expanding our higher complexity services and by growing plan memberships. Our path forward is clear, simplify our model, do more of what we do best and extend the reach of the Auna Way. Now turning to our financial results, Our top line grew 10% FXM in the first quarter with revenues increasing across all segments. However, due to two extraordinary items which we will detail later in the presentation, adjusted EBITDA decreased 5% FXN and margin contracted by 2.9 percentage points. Nonetheless, we are tracking well against our 2026 guidance. In Mexico, we delivered higher service volumes and utilization levels increased. More importantly, utilization grew in high complexity services, particularly in surgeries and oncology. Our operations in Mexico have delivered as planned 19% quarter over quarter increase in adjusted EBITDA. The Peru segment of our integrated platform performed well maintaining its growth momentum during the quarter despite adjustments related to payer reconciliations that impacted revenue and therefore profitability. Revenues increased 9% supported by strong volume growth in healthcare services including high complexity services, while Onco Salud continued to add new plan members through growing B2B sales. In Colombia, we have largely put the intervened payers behind us thanks to risk sharing businesses with establishing new payer relationships. These unique agreements have consistently produced more predictable top line and cash flow growth. Turning briefly to our balance sheet, our leverage ratio was 3.7 times. Our cash position increased 22% to 409 million soles with free cash flow increasing 2.6 times versus a comparable period last year, an important indicator of our ability to optimize our operations for effective cash management across our regional platform. Let’s turn to slide 5. Growing volumes and higher levels of capacity utilization in healthcare combined with increased plan memberships helped drive the quarter’s strong top line growth and cash flow. As you can see in the bottom left of this slide, total utilization increased 1.4 percentage points to 66%. However, our focus is on increasing utilization and higher margin high complexity services rather than on bed occupancy alone. In Peru where our business is vertically integrated, healthcare plan memberships grew 6% while oncology plans grew 3%. Furthermore, the oncology MLR was below 50% within its expected range. The run rate profitability of our regional platform also improved significantly during the quarter. Again, adjusted EBITDA was down 5% FXN, primarily due to revenue adjustments and certain payroll increases. Let’s now move to slide seven for a closer look at the performance of each segment of our platform starting with Mexico. Our Mexico operations recovered strongly during the quarter with revenue increasing 8%. This resulted from our new status in preferred provider tiers with two major payers and doctors hospital, the substantially improved economics of our new east leon contract, expanded B2B service packages and additional growth in the out of pocket segment. This also produced a 19% quarter over quarter increase in adjusted EBITDA and a 3.5 percentage point increase in margin. On a year over year basis, EBITDA increased 23% year over year. Please turn to slide 8. Revenue growth in Peru was 9% and was impacted by revenue adjustments related to higher revenue reconciliation penalties implemented by payers in the market. Revenues from healthcare services grew 7% reflecting the advantages of our growing scale. Commercial initiatives drove most of the volume and utilization increases. On the insurance side, Onco Salud revenues grew 12% driven both by annual price increases and growth in B2B plan memberships, including the 20,000 employees of a new group policy for the nation’s judiciary that we were awarded. We see a growing opportunity for commercial initiatives to increase our share of the B2B segment of Peru’s insurance market. First quarter adjusted EBITDA decreased 3% with margin contracting by 2.3 percentage points impacted by the aforementioned revenue adjustments as well as a delay in rebate recognitions and an increase in doctor compensation. Excluding the revenue adjustments, Peru’s adjusted ebitda would have increased 7%. Let’s move to Colombia on Slide 9. Our revenue growth in Colombia accelerated, growing 13% in the first quarter as we further reduced our reliance on intervene payers and increased the proportion of risk sharing agreements with payers which rose 6 percentage points to 21% of Columbia’s total revenue. It is important to note that revenues From Intervene payers fell 5 percentage points year over year from 19% to 14% at the same time, revenues from new payers increased 1.5 times versus the prior year quarter and currently represent 12% of total revenue. Clearly our franchise is strong in Colombia. We have effectively navigated the fallout from last year’s payer intervention and have emerged growing at a faster pace. Adjusted EBITDA increased 7% with a margin decreasing by 1.7 percentage points. The lower margin mainly reflects the higher proportion of risk sharing contracts and increased variable costs related to higher volumes serviced in high complexity care. Now I’ll turn the call over to Gcelle who will review our results in more detail.
Giselle Remi (Chief Financial Officer and Executive Vice President)
Thanks Susan Beginning with Slide 11, the revenue growth was strong across our regional platform with consolidated revenue reaching 1.2 billion soles at quarter end and year over year growth of 10% in FX neutral terms. As Suso noted, the growth followed the strategic measures that we implemented in Mexico and Colombia last year, helping us to build a healthier revenue mix while Peru continued leveraging its scale to capitalize on the many growth opportunities that remain in its market. Taking a closer look at Mexico’s recovery, this was primarily driven by surgery and oncology volumes which grew 15 and 32% sequentially. In Peru, growing B2B sales were a major growth driver, particularly the 20,000 additional plan memberships through the group policy that we secured with the nation’s judiciary and in our healthcare network. Higher conversion rates drove surgery volumes up significantly while emergency treatments increased 20%. From commercial initiatives applied to corporate policyholders, Colombia grew the strongest during the quarter. In addition to the growth drivers that Suso has already highlighted, it is important to note that our capacity utilization returned to 2024 levels before the revenue rebalancing we conducted reducing exposure to government intervene payers. Let’s now move on to adjusted EBITDA on slide number 12, consolidated adjusted EBITDA decreased 5% FXN and includes the impact of revenue adjustments in Peru and payroll increases in Mexico due to higher compensation costs related to the newly appointed leadership team and to investments in attracting and incentivizing physicians. In Colombia, a 23% increase in the minimum wage drove compensation costs higher versus last year. Adjust EBITDA recovered in Mexico growing 19% quarter on quarter versus fourth quarter of 2025. Let’s now turn to adjusted net income on slide number 13 reflecting the underlying strength of Auna’s regional platform. Our operating profit increased 11% to 155 million soles in the first quarter, which was more than offset by non cash FX losses due to the depreciation of the Peruvian solution below the levels of the protective range of the new hedging structure that we put in place at the end of 2025. This reset will help reduce FX losses in the future which otherwise would have been higher this quarter. Slide 14 Please Our free cash flow increased 2.6 times versus the first quarter of 2025 to 152 million soles primarily on a 45% increase in pre tax operating cash flow shown at the left of the bridge. This reflects our strong growth coupled with higher cash conversion resulting from solid working capital management as well as supplier financing initiatives that we’ve undertaken. Moving to the middle of the bridge, CapEx, which represented 3% of revenue, primarily consisted of infrastructure upgrades, purchases of medical equipment and costs related to the implementation of the new Hospital Information System and erp, mainly in Mexico. This cash use was reduced by an inflow resulting from the continued rebalancing of Auna to WUDOS investment portfolio towards liquid securities. The 88 million soles in financing activities at the right of the Bridge is comprised of 54 million soles of interest and hedge premium payments and interest on working capital facilities as well as a 34 million soles decrease in working capital borrowings. Lastly on this slide, the increase in free cash flow and the reduction in interest payments mean that we expect positive cash flow generation after interest payments to grow in 2026. This will work towards achieving our leverage target of three times in the medium term while also continuing to invest in our growth initiatives. Let’s now move on to slide 15. We began 2026 with a stronger capital structure benefiting from lower interest expenses, an improved maturity profile and reduced FX exposure. It’s important …
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