As we gear towards a financially sustainable future, our strategy towards this end incorporates fortifying domestic healthcare operations and accelerating our position as a leading medical tourism services in the region. As such, we strive to reinforce our innate strengths through innovation in diagnostics, expanded specialty care, and digital transformation while also scaling up international patient services. Our strong financial performance in FY2024-25, in the backdrop of shifting economic dynamics and global healthcare transformations indicate our financial resilience and strategic foresight. As a leading private healthcare institutions, Nawaloka Holdings PLC demonstrated exceptional adaptability in navigating cost pressures, investing in technological innovation and expanding revenue streams while sustaining our commitment to delivering compassionate, world-class medical care.

Financial Performance

Nawaloka Hospitals PLC recorded a consolidated revenue of Rs. 11,013 Mn., reflecting a 6% year-on-year growth. Increased patient volumes, operational efficiency and adaptability amidst industry-wide cost pressures drove this performance. The hospital’s net profit after tax of Rs. 56 Mn., representing a 119% growth compared to the previous year. Meanwhile, we witnessed significant growth in medical tourism services revenue during the period under review. Nawaloka strengthened its position as a leading player in Sri Lanka’s medical tourism services market, driven by increased revenue from international patients. This reflects a notable year-on-year improvement compared to the previous period. This surge not only mitigated domestic market fluctuations but also positioned Nawaloka as a catalyst in promoting medical tourism and generating foreign exchange for the national economy.

Overall, profit acceleration is a testament to the hospital’s effective approach to cost containment initiatives, optimal resource utilisation and focus on margin protection despite macroeconomic headwinds such as energy tariffs and currency fluctuations.

The table below further illustrates the strategic responses that led to the stable financial performance.

Revenue Growth Drivers

REVENUE DRIVERS

Expanded CT/MRI capabilities and South Asia’s first AI-powered Radiology Centre

New infrastructure and CRRT (Continuous Renal Replacement Therapy) technology enhanced capacity.

Establishment of the Elite Medical Centre and International Patient Care Centre (IPCC)

Insurance partnerships

VALUE CREATED

Increased patient volume

Increased capacity to offer dialysis and renal care

240,000 outpatient visits

Strengthened global appeal

Admissions via insurance rose to 35%, improving both access and cash flow stability.

The year under review also marked a notable shift in the hospital’s payer mix, reflecting broader changes in patient behaviour and healthcare financing trends. This growth was driven by expanded partnerships with both local and international insurance providers, the introduction of streamlined cashless admission processes, and the increasing popularity of corporate health check packages. Despite this shift, out-of-pocket payments remained strong at around 60%, while charitable and subsidised care accounted for 5% – 10% of total admissions. This balanced payer mix continues to support revenue diversification and financial resilience.

Additionally, we sustained revenue growth across major clinical departments. This reflected both operational enhancements and increased demand for specialised services. Radiology emerged as a strong contributor, bolstered by the integration of AI-enabled diagnostic tools and expanded CT/MRI capacity, which led to a rise in referrals. Laboratory Services also posted significant gains, driven by the expansion of regional sample collection centres, digital reporting capabilities, and proactive preventive screening initiatives. The Dialysis Unit experienced a marked uptick in patient volumes, supported by upgraded infrastructure and full utilisation of available machines. Meanwhile, OPD and Channelling services saw continued growth, particularly in internal medicine, paediatrics, and gynaecology, thanks to extended service hours and improved access through digital platforms. Even as certain units like the Heart Centre and Fertility Unit encountered volume fluctuations due to macroeconomic constraints, these challenges were proactively addressed through targeted awareness campaigns and enhanced financial counselling for patients.

As Sri Lanka continues to strengthen economic stabilisation, organisations face inevitable cost pressure challenges from ongoing cost pressure drivers. Nawaloka Hospitals PLC responded to such pressure with a pragmatic and effective approach to maintain margin resilience as detailed below:

This disciplined approach allowed Nawaloka to scale revenue without proportionate increases in cost, thus preserving profitability.

Occupancy Rates

During the year under review, we maintained a bed occupancy rate of 45% – 55%. With approximately 330+ operating beds scattered over its main hospital and satellite sites, Nawaloka Hospitals serves a diverse population. This consistent level of utilisation reflects the effectiveness of our patient retention strategies, seamless integration of multi-specialty services, and a strong reputation for delivering positive clinical outcomes in high-demand specialties such as cardiology, oncology, and surgery.

Optimising Patient Care through Infrastructure and Medtech Integration

Nawaloka’s purpose-built infrastructure, combined with advanced Medtech integration, has significantly reduced the need for prolonged hospital stays while expanding access to day care treatments and procedures. Enhanced diagnostic accuracy, minimally invasive surgical capabilities, and streamlined care pathways enable patients to return home sooner, supporting faster recovery and improved well-being. This shift towards efficient, same-day treatment models is being strategically managed to align with evolving global healthcare trends, ensuring both
high-quality patient outcomes and the hospital’s long-term financial sustainability.

Strategising for Financial Sustainability

Nawaloka Hospitals’ financial sustainability strategy is anchored in diversification, digital transformation, and a strong commitment to patient-centred value creation. Recognising the need to build resilience in a rapidly evolving healthcare environment, we strategically expanded beyond traditional service boundaries, while embedding technology to optimise operations and enhance financial transparency.

Looking into both risk mitigation and social impact to balance financial success with our impact on society, Nawaloka Hospitals PLC increased focus on the areas below during the year under review:

• Transparent pricing and easily accessible rate cards
• Tailored packages for senior citizens, children, and corporate employees
• Responsive customer care teams to explain procedures and billing

Increased Attention on Pricing and Access

• Prudent debt management and ROI-focused capital spending
• No major equity dilution or restructuring during the financial year leading to a capital structure remains intact.

Risk Management

A key pillar of this strategy is the diversification of revenue streams. In FY 2024-25, Nawaloka significantly broadened our service portfolio by investing in telemedicine platforms, establishing the surgical hub and expanding international patient services through the ELITE Medical Centre and International Patient Care Centre (IPCC).

As part of its long-term financial sustainability strategy, Nawaloka Hospitals has placed significant emphasis on expanding our footprint in international healthcare markets. In response to rising global demand for high-quality, cost-effective medical services, we developed a comprehensive suite of specialised treatment packages tailored specifically to international patients. These offerings span a broad spectrum of advanced clinical services including cosmetic and re-constructive surgeries, cardiac interventions, orthopaedic procedures, oncology services, fertility treatments and dental care.

To ensure a seamless and reassuring experience, these medical services are integrated into full-service international patient packages. These encompass end-to-end logistical support, including travel arrangements, visa facilitation, accommodation, language translation, and post-treatment care coordination.

A cornerstone of this offering is the hospital’s dedicated International Patient Services Unit, which oversees the patient journey holistically, starting from initial consultation and admission to discharge and follow-up. This unit plays a pivotal role in maintaining high satisfaction levels among international patients.

Cultural sensitivity and inclusivity are integral to the Group’s international care model. To accommodate a diverse global clientele, Nawaloka offers multilingual support in Chinese, Hindi, Arabic, French, German, Russian, and Mandarin. In addition, culturally aligned amenities such as halal-certified dining options and designated prayer spaces have been introduced, particularly to serve Middle Eastern patients. All staff engaged in international patient care are trained in cultural competence, ensuring respectful, personalised, and dignified treatment at every
stage of care.

These globally-attuned, concentrated efforts allow us to position Nawaloka as a preferred healthcare destination in the South Asian region, and contribute to foreign exchange inflows.

Moreover, we continuously upgrade and adapt our products and services to facilitate the broader revenue diversification strategy. The illustration below presents product and service enhancements carried out during the year in review.

Operational efficiency has also been prioritised through a suite of digital transformation initiatives. The implementation of the integrated billing system has enabled real-time invoice generation. AI-assisted cost estimation tools now support more accurate financial planning at the point of admission, while the hospital’s real-time performance dashboard offers actionable insights to resolve service bottlenecks and streamline workflows. These innovations have improved financial governance, accelerated decision-making, and significantly reduced administrative overheads.

Medtech Integration on pages 62 to 64 of this report provides more details on technology and digitalisation.

To foster greater patient empowerment, Nawaloka has taken deliberate steps to enhance pricing transparency and convenience. Approximately 75% of commonly utilised procedures now have baseline pricing available online or through printed materials. Tools such as electronic discharge summaries, QR-code-based payments, and virtual cashier services have simplified the financial journey for patients, strengthening trust in a price-sensitive market. These patient-centric features are supported by responsive customer service teams who guide individuals through insurance pre-approvals, billing options, and payment flexibility.

Underlying this multi-pronged approach is a disciplined focus on cost containment and process digitisation. The Group continues to pursue ROI-focused capital spending, ensure debt prudence, and modernise non-clinical workflows to maximise efficiency. Ultimately, we combine financial discipline with innovation and a global outlook to sustain growth.

Infrastructure and Capital Expenditure

Nawaloka Hospitals PLC continued to invest strategically in infrastructure and medical technology to enhance clinical capability, patient experience, and long-term operational resilience. In FY 2024-25, the hospital allocated over Rs. 340 Mn. in capital expenditure.

Our purpose-built infrastructure directly contribute to enhanced patient wellbeing and clinical excellence. As such, the investments we make towards infrastructure development are welch-calulated to create long-term financial, environmental and social value.

Key investments during the year

Acquisition of South Asia’s first AI-integrated radiology systems, significantly enhancing diagnostic precision and service throughput

Expansion of critical care capacity, including upgrades to the Bone Marrow Transplant Unit, Fertility Unit, and Dialysis Services

Procurement of a Continuous Renal Replacement Therapy (CRRT) machine, providing gentle, continuous dialysis support for critically ill patients in intensive care

Installation of modular operating theatres and safety-enhanced surgical systems to support advanced surgical procedures

Digital infrastructure upgrades, including full integration of Electronic Health Records (EHR) and billing systems to enhance clinical and administrative workflows

Strategic capital planning remains a key aspect of our roadmap towards lasting financial sustainability. Nawaloka’s capital expenditure strategy follows a structured roadmap guided by asset lifecycle management and demand-driven expansion. CAPEX is expected to rise progressively from Rs. 340 Mn. in 2025 to a peak of Rs. 1,885 Mn. in 2027, before tapering to Rs. 434.1 Mn. by 2029. This five-year investment plan supports infrastructure modernisation, clinical expansion, and sustained technological leadership.

Meanwhile , the hospital’s equipment base remains modern, with robust preventive maintenance protocols as detailed below:

This lifecycle-based strategy minimises downtime, enhances patient safety, and ensures equipment is aligned with evolving clinical needs.

Future Outlook

Looking ahead, Nawaloka Hospitals PLC remains committed to sustaining the current financial momentum through a blend of strategic foresight, operational agility, and targeted innovation. As Sri Lanka’s economy continues its stabilisation path, the healthcare sector is expected to face persistent cost pressures and evolving patient expectations. Against this backdrop, our focus will remain on driving growth through expanded international patient services, further diversification of revenue streams, and continuous enhancement of patient-centric care models.

We plan to strengthen our presence in the global healthcare market by scaling up our medical tourism capabilities, while simultaneously broadening our diagnostic and specialty care portfolios. Our capital investment roadmap, will fuel infrastructure modernisation and technological upgrades to support next-generation care delivery.

Digital transformation will remain a key enabler, with further integration of AI tools, automation, and analytics to elevate operational efficiency and financial governance. Equally, our patient empowerment agenda will advance through greater pricing transparency, digital access, and personalised service touchpoints.