IHH Healthcare Q3 net profit up 77% to RM550m

MALAYSIAN hospital group IHH Healthcare's third-quarter net profit jumped 77 per cent to RM550 million (S$177.6 million) year on year amid a steady return of patients to hospitals and the continued provision of Covid-19 support services.

For the 3 months ended Sept 30, revenue was up 26 per cent to RM4.4 billion while Ebitda increased 32 per cent to RM1.1 billion with stringent cost controls in place, said the group in a press statement on Monday (Nov 29).

Net operating income was up 49 per cent to RM354.6 million and return on equity reached 8.2 per cent in Q3.

IHH said its key markets - Malaysia, Singapore, India and Greater China - all saw improved performance. In Greater China, Gleneagles Hong Kong Hospital reported positive earnings before interest, taxes, depreciation, and amortisation (Ebitda) in Q3.

Overall, the positive earnings recorded was also due to the recognition of a previously unrecognised deferred tax asset by Acibadem Holdings.

IHH's portfolio of healthcare brands in key markets comprise Acibadem, Mount Elizabeth, Prince Court, Gleneagles, Fortis, Pantai, Parkway and IMU.

For the 9 months ended Sept 30, revenue, Ebitda and net profit grew to RM12.7 billion, RM3.2 billion and RM1.4 billion respectively from a lower base a year ago, when major lockdowns across the group's network had impacted its performance.

"Our efforts to optimise our capital structure and operations have started to pay off. Gleneagles Hong Kong Hospital delivered a positive Ebitda in the third quarter, while Turkey and India operations have recovered fully and are geared for continued expansion," said Kelvin Loh, IHH managing director and chief executive officer.

But with operations returning to normalcy, revenues from Covid-19 services is expected to gradually decrease.

Staff costs are also expected to rise as the group strengthens its clinical talent across its hospital services network with a strong return of core non-Covid business.

The group is looking to drive business performance by diversifying into new revenue streams and expanding into new or established clusters where they are earnings-accretive to IHH, among other plans.

"Our growth from here will be driven both organically and inorganically. We are also making innovation investments as part of our digital transformation roadmap to seize disruptive opportunities that will give patients better, faster and affordable care," said Loh.

IHH shares closed up 2 Singapore cents or 1 per cent to S$2.12 on Monday.