IHH Healthcare Q4 net profit up 8%, declares higher final dividend

IHH Healthcare's Q0F net profit was up 8 per cent to RM453.6 million (S$145.7 million) for the fourth quarter ended Dec 31, 2021, from RM419.4 million the year before.

While the group is expecting short-term headwinds as Covid-19 services taper off along with rising staff costs and inflationary pressures, chief executive officer and managing director Kelvin Loh is bullish on the pick up in both domestic and foreign patient loads as the pandemic comes under control.

IHH is anticipating a slowdown in Covid-19-related services, which in FY2021, accounted for under 15 per cent of revenue. Meanwhile, its core operations and medical tourism will see improvement, according to Joerg Ayrle, IHH chief financial officer at a media briefing on Wednesdat (Feb 23).

Revenue for the fourth quarter was up 19 per cent to RM4.5 billion from the RM3.8 billion the previous year thanks to growth across the countries it operated in, with patient volumes picking up since June 2020. The acquisition of Bel Medic in Serbia in July 2021 and DDRC SRL in India in April 2021 also gave revenue a boost.

Ebitda (earnings before interest, taxes, depreciation and amortisation) was up 7 per cent for the latest quarter with revenue growth being partially offset by higher staff costs and operating expenses, lower government grant income and lower valuation gain on investment properties of Parkway Life Reit.

Net income and net operating income increased to RM453.6 million and RM440.8 million respectively on the back of increased patient volumes though this was partially offset by higher costs.

Earnings per share for the fourth quarter was 4.90 sen, up from 4.52 sen the previous year.

Even as IHH fought to overcome the challenges posed by the pandemic, it had continued to deepen its clinical capabilities, said Loh, adding that the group had undertaken several complex surgeries recently.

Beyond focusing on recovering from the impact of Covid-19, the group is looking towards boosting organic growth such as by increasing the number of beds across the group, said Loh.

"We will acquire strategic assets, develop and grow our laboratory business and drive digital transformation," Loh added.

For the full year, net profit came in at RM1.9 billion, from RM288.9 million the previous year. Revenue rose 28 per cent to RM17.1 billion, compared with a lower base of RM13.4 billion in FY2020 following several lockdowns in markets IHH operates in.

Full year earnings per share stood at 20.20 sen, versus 2.27 sen the year before.

The board has declared a a first and final dividend of 6 sen per share. IHH paid out a dividend of 4 sen in FY2020.

IHH shares ended Wednesday at S$2.03, down S$0.02 or 1 per cent.