IHH Healthcare posts Q3 net profit of RM236.3m

Singapore

GLOBAL healthcare provider IHH Healthcare posted a net profit of RM236.3 million (S$77.37 million) for the third quarter to September, reversing from a loss of RM104.1 million a year ago, as a result of contribution from recently acquired hospitals, ramped-up operations and increased capacity.

Correspondingly, earnings per share stood at 2.44 sen for the quarter, versus a loss per share of 1.53 sen a year ago.

Revenue increased by 33 per cent to RM3.79 billion from RM2.84 billion, announced IHH Healthcare in a regulatory filing on Friday after market closed.

It attributed its revenue and earnings before interest, tax, depreciation and amortisation (Ebitda) improvements to "the sustained organic growth from existing operations and the continuous ramp-up of Gleneagles Hong Kong Hospital and Acibadem Altunizade Hospital (both opened in March 2017), as well as contribution from the increased capacity at Acibadem Maslak Hospital (expansion completed in October 2018)".

The acquisition of Amanjaya in October 2018 and Fortis in November 2018 also contributed to the better financial performance.

IHH Healthcare didn't declare a dividend for the quarter.

Its nine-month earnings came in at RM510.8 million, a marked improvement over RM118.3 million a year ago. Revenue for this period was RM11.08 billion or 33 per cent higher than the RM8.36 billion registered a year ago.

On Hong Kong's protests, the impact on its services has overall been "limited" and operations have remained "stable" so far, but it flagged that a prolonged fallout may dampen the ramp-up of Gleneagles Hospital Hong Kong.

On its strategy of multi-country portfolio via both organic and inorganic growth, IHH Healthcareexplained: "The strategy provides a good balance of cash flow-generative markets such as that of Singapore and Malaysia, medium-term growth momentum from Turkey and long-term growth opportunities from India and Greater China. The group expects that the expansion projects in Malaysia and China will provide sufficient capacity to meet demand."

While it expects pre-operating expenses and start-up costs of new operations to partially erode its profitability initially, the group seeks to mitigate the effects by ramping up patient volumes in tandem with phasing in opening of wards at these new facilities to achieve optimal operating leverage.

Its shares closed two Singapore cents, or 1.14 per cent, down at S$1.73.