AUNA Finalizes Addendum with EsSalud, Enabling Torre Trecca Construction in Peru

What happened

Auna has formalized an addendum to its existing PPP agreement with EsSalud, clearing the way for construction to begin on the Torre Trecca outpatient facility in Lima. This milestone was anticipated in the DeepValue report, which highlighted that EsSalud received the construction license in late 2025 with final approval expected by year-end. The project involves a ~S/490 million investment and is set to become Peru's largest outpatient center, potentially bolstering Auna's footprint in the region. However, the company's core challenges persist in Mexico, where operational disruptions have led to a 12% YoY revenue decline and 29% EBITDA drop in 3Q25, amid high leverage of ~3.6x Net Debt/EBITDA. Thus, while Peru progress is positive, it does not directly address the critical need for Mexico recovery or the funding plan for Auna's ~$500 million Mexico expansion.

Implication

The addendum finalization reduces near-term execution risk for the Torre Trecca project, ensuring construction can proceed as planned and potentially enhancing long-term Peruvian revenue streams. It reinforces Auna's ability to advance PPP initiatives, which may contribute to regional diversification and operational stability. However, the investment thesis hinges on Mexico's operational and financial recovery, which remains unproven with recent declines and leverage concerns. Capital allocation pressures endure, as the company must fund this Peru project alongside its ~$500 million Mexico plan without resorting to dilutive equity issuance or worsening leverage. Investors should view this news as incremental progress that does not alter the fundamental WAIT rating, pending concrete evidence from Mexico operations and financing clarity.

Thesis delta

No material shift in the investment thesis has occurred; the core narrative remains centered on Mexico's operational normalization and capital structure management. This Peru milestone, while positive, was already incorporated into expectations and does not address the key risks of equity dilution or leverage improvement. The WAIT call persists, emphasizing the need for evidence from Mexico by 2Q26 to reconsider the rating.