20-F: Auna S.A. Reports Mixed Financial Results Amidst Strategic Growth

Auna S.A. disclosed its 2025 financial results, showing a slight decrease in total revenue but growth in key segments, alongside significant debt refinancing and ongoing IT system enhancements.

Summary

• Auna S.A.'s total revenue remained relatively flat at S/4,385.3 million for the year ended December 31, 2025, a marginal decrease of 0.02% from S/4,386.1 million in 2024.
• The Oncosalud Peru segment saw revenue increase by 8.7% to S/1,164.2 million, driven by a higher number of plan members and increased average revenue per member.
• Healthcare Services in Peru revenue grew by 8.9% to S/1,084.3 million, attributed to higher service volumes and increased prices.
• Healthcare Services in Colombia experienced a slight 0.2% decrease in revenue to S/1,440.1 million, impacted by reduced services to government-intervened payors.
• Healthcare Services in Mexico reported a 13% revenue decrease to S/1,038.8 million, mainly due to lower surgery and emergency volumes.
• Operating profit decreased by 20.2% to S/625.3 million, largely due to lower revenues in Mexico and increased selling and administrative expenses.
• Net finance costs decreased by 28.3% to S/(436.5) million, benefiting from favorable foreign exchange effects.
• Profit for the year decreased by 10.5% to S/110.9 million.
• The company reported material weaknesses in its internal control over financial reporting, primarily related to IT general controls and process-level controls, with remediation efforts ongoing.
• Auna S.A. refinanced its Sponsor Financing and completed a tender offer for its 2029 Notes, issuing new 2032 Notes and Term Loans to manage its debt structure.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the decrease in operating profit and net profit, the identified material weaknesses in internal controls, and the increase in selling and administrative expenses, despite positive revenue growth in some segments and successful debt refinancing.

Positives

• Oncosalud Peru segment revenue increased by 8.7% to S/1,164.2 million, driven by a 4.4% net increase in plan members and a 3.7% increase in average monthly revenue per plan member.
• Healthcare Services in Peru segment revenue increased by 8.9% to S/1,084.3 million, due to higher service volumes and increased prices.
• The company's gross profit margin in Oncosalud Peru was 47.5%, in Healthcare Services in Peru was 29.4%, in Healthcare Services in Colombia was 26.5%, and in Healthcare Services in Mexico was 40.3%.
• Net finance costs decreased by 28.3% to S/(436.5) million, primarily due to favorable foreign exchange effects.
• The company's cash and cash equivalents increased to S/335.4 million as of December 31, 2025.
• The company's net debt decreased by S/111.6 million from December 31, 2024, to S/3,656 million as of December 31, 2025.
• The company's Consolidated Leverage Ratio was 3.62:1.00 and its Consolidated Interest Coverage Ratio was 1.81:1.00 as of December 31, 2025, meeting the covenants for the 2032 Notes.
• The company's Consolidated Leverage Ratio was 3.64:1.00 and its Consolidated Interest Coverage Ratio was 2.07:1.00 as of December 31, 2025, meeting the covenants for the Credit Facilities.

Negatives

• Total revenue from contracts with customers decreased by 0.02% to S/4,385.3 million.
• Healthcare Services in Mexico segment revenue decreased by 13% to S/1,038.8 million.
• Operating profit decreased by 20.2% to S/625.3 million.
• Profit for the year decreased by 10.5% to S/110.9 million.
• Cost of sales and services increased by 2.3% to S/2,721.6 million.
• Selling expenses increased by 11.8% to S/220.9 million.
• Administrative expenses increased by 3.0% to S/812.7 million.
• Loss for impairment of trade receivables increased by 17.6% to S/48.1 million.
• The company identified material weaknesses in its internal control over financial reporting, leading to an adverse opinion from its auditor.
• The company's gross profit margin decreased by 1.4% to 37.9%.

Risks

• Brand Reputation Risk: Negative impacts on brands reputation could materially harm the business.
• Cost Control Challenges: Inability to control healthcare costs or raise prices to offset increases could adversely affect operating results.
• Third-Party Payer Relationships: Deterioration in relationships with third-party payers could negatively impact revenues.
• IT Systems Vulnerability: Failures in IT systems could disrupt business operations.
• Competition and Market Fragmentation: Intense competition in fragmented markets could harm market share and performance.
• Labor and Talent Shortage: Difficulty in recruiting and retaining medical professionals could increase labor costs.
• Regulatory Compliance and Licensing: Non-compliance with regulations or failure to obtain licenses could hinder operations.
• Acquisitions and Integration Risks: Acquisitions may disrupt business, and integration challenges could limit expected benefits.
• Debt and Financial Stress: High indebtedness and reliance on subsidiaries for payments may limit financial flexibility.
• Supplier Dependence: Reliance on a limited number of suppliers could create operational risks.
• Liabilities and Legal Risks: Exposure to liabilities from medical malpractice, lawsuits, and regulatory non-compliance could result in financial losses.
• Geopolitical and Regional Risks: Political, economic, and social instability in Mexico, Peru, and Colombia could negatively impact operations.
• Climate and Health Crisis Risks: Adverse climate conditions or future pandemics could disrupt operations.
• Emerging Market and Political Risks: Perceptions of risk in emerging markets could affect operations.
• Inflation, Currency and Tax Risks: Increased inflation, currency fluctuations, and changes in tax laws could adversely impact financial condition.
• Shareholder and Governance Risks: Concentration of voting control with Enfoca could lead to conflicts of interest.
• Share Price and Liquidity Risks: Market price fluctuations and lack of an active market could affect share liquidity.
• Regulatory and Governance Risks: Reduced reporting requirements as a foreign private issuer may make shares less attractive.
• Jurisdiction and Legal Risks: Difficulties in pursuing legal actions in Luxembourg and judgments payable only in euros.
• Dividend Risk: Ability to pay dividends is restricted under Luxembourg law.

Future Outlook

Looking ahead to 2026, Auna expects continued growth in its markets, supported by sustained commercial momentum and strong operating execution. The company plans to focus on increasing efficiencies across its network, maintaining disciplined cost management, and expanding access to high-quality healthcare.

Management Comments

• Management believes that its available cash and cash equivalents, cash flows expected from operations, and borrowings available under revolving credit lines will be adequate to meet capital expenditure and liquidity needs for the foreseeable future.
• Management believes that its platform provides a differentiated operating ability to serve under-penetrated markets, which is further complemented by its robust platform that can efficiently scale to serve all segments of the population and unlock operating efficiencies.
• Management believes that the combined strengths and proven experience of its management team, board of directors, and shareholders have succeeded in making Auna one of the premier companies in the healthcare industry in SSLA.
• Management believes that the track record and depth of knowledge of its management team provide a distinct competitive advantage.
• Management believes that the continuing support, engagement with management, and long-term vision for growth of its controlling shareholder, Enfoca, provides a competitive advantage.

Industry Context

StockSavvy.ai notes that Auna's performance reflects broader trends in the Latin American healthcare sector, characterized by increasing demand for quality healthcare, growing middle classes, and a need for integrated healthcare solutions. The company's expansion into Mexico and focus on high-complexity care align with market opportunities, while challenges in cost control and regulatory environments in Colombia and Peru remain key factors to monitor.

Comparison to Industry Standards

• Auna's Net Promoter Scores (NPS) of 85 in Mexico, 86 in Peru, and 90% in Colombia as of December 31, 2025, compare favorably to large healthcare networks in Latin America such as Rede DOr (59) and DASA (83.7) as of 2024.
• Auna's five-year cancer survival rate of 74% for its oncology plans is a positive indicator of its clinical effectiveness, though direct industry benchmarks for this specific metric in Latin America are not provided in the filing.
• The company's medical loss ratio (MLR) of 54.2% for its oncology and general healthcare plans as of December 31, 2025, is a key metric in the healthcare industry, indicating the percentage of premiums used for medical treatment.
• Auna's hospital bed density per 1,000 inhabitants in its operating countries (Mexico: 1.0, Peru: 1.6, Colombia: 1.9) is below the WHO minimum recommended standard of 3.0 and OECD average of 4.2, highlighting the market's potential for expansion.

Corporate Governance

Legal Proceedings

• The company is party to various legal and administrative proceedings arising in the ordinary course of business, including medical malpractice, employment, labor, and tax lawsuits.
• As of December 31, 2025, provisions for outstanding claims and others amounted to S/10.2 million, covering probable losses.

Related Party Transactions

• Enfoca, the controlling shareholder, holds 72.9% of class B shares, representing 68.3% of total voting power.
• Enfoca and its affiliated entities are parties to the Sponsor Financing, which is secured by Enfoca's shares.
• Certain officers and directors are employed by or affiliated with Enfoca, potentially leading to conflicts of interest.
• The company has a related person transaction policy requiring approval or ratification by the audit and risk committee.
• In 2023, the company reimbursed its controlling shareholder for administrative expenses and travel costs, but not in 2024 or 2025.
• Dr. Luis Felipe Pinillos and Dr. Carlos Vallejos, founders and directors, provide medical services and receive customary compensation.
• The company reimbursed Dr. Vallejos for certain out-of-pocket expenses totaling S/0.5 million in 2023, 2024, and 2025.
• The company entered into a registration rights agreement with certain shareholders, allowing them to require the registration of their shares for resale.

Stakeholder Impact

• Shareholders: Potential conflicts of interest due to controlling shareholder's influence, risks associated with dual-class share structure, and potential dilution from future capital raises.
• Employees: Subject to labor laws, union agreements in Mexico and Colombia, and company initiatives to improve retention and development.
• Creditors: Significant indebtedness and restrictive covenants under debt agreements could impact financial flexibility and ability to raise capital.
• Suppliers: Reliance on a limited number of suppliers for medical equipment and supplies poses operational risks; ESG criteria are being implemented for critical suppliers.
• Patients: The company aims to provide accessible, high-quality, and affordable care, with a focus on patient-centricity and integrated healthcare experiences.

Next Steps

• Continue implementing and enhancing controls related to IT general controls and process-level controls to remediate material weaknesses.
• Focus on increasing efficiencies across the network, maintaining disciplined cost management, and expanding access to high-quality healthcare.
• Continue to evaluate acquisition and investment opportunities aligned with strategic goals.
• Monitor and manage foreign exchange rate risks through hedging arrangements.
• Continue to invest in technology solutions to enhance patient care and operational performance.

Key Dates

Recommendation

While Auna S.A. shows positive revenue growth in key segments and has successfully refinanced its debt, the decrease in overall profitability, material weaknesses in internal controls, and ongoing integration challenges in Mexico present significant risks. The company's strong market position in Peru and its strategic expansion efforts are positive, but the identified issues warrant a cautious 'hold' stance until operational improvements and control environment enhancements are demonstrated.

Keywords

Auna S.A., SEC Filing, Form 20-F, Healthcare, Hospitals, Clinics, Insurance, Peru, Colombia, Mexico, Financial Results, Debt Refinancing, Senior Secured Notes, Credit Facilities, Internal Controls, Goodwill Impairment, IFRS, EBITDA, Healthcare Services