IHH Healthcare records Q2 net loss of RM120.6m

IHH Healthcare, in results announced Thursday, fell into the red for its second quarter ended June 30, with a net loss of RM120.6 million (S$39.5 million), compared to the RM185 million profit a year ago.

This was attributed to lower operating performance and the realisation of foreign exchange loss of RM94.8 million from the translation of non-Turkish lira borrowings.

However, the impact to its bottom line was mitigated by a fair-value gain of RM43.3 million on cross-currency swaps in relation to the non-Turkish lira borrowings.

For the half year, this brings the Malaysia-registered, Singapore Exchange-listed hospital operator into a total loss of RM440.4 million, compared to the 274.5 million in earnings the previous year.

Loss per share for the quarter came in at 1.64 sen, a 188 per cent drop from the 1.86 sen earnings per share in Q2 2019.

Dr Kelvin Loh, managing director and chief executive of IHH, said: "Our results for Q2 2020 naturally reflected the unprecedented challenges from Covid-19... We saw the worst impact in April and May."

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Revenue for IHH fell year on year (yoy) across the group's operations in Malaysia, Singapore, central and eastern Europe and India; its India operations clocked the biggest decline in revenue of 49 per cent yoy to RM416.6 million.

In Malaysia and Singapore, revenue fell 23 per cent and 24 per cent yoy to RM434.3 million and RM805.9 million respectively.

Of its Malaysia operations, the group said on-demand Covid-19 testing services mitigated the fall in revenue. Similarly for Singapore, while revenue impact was most pronounced in April and May, it was mitigated by significant contribution from Covid-19 services such as diagnostic testing, border screening and treatment of infected patients.

But Dr Loh noted that as countries began to re-open in June, the group began seeing "a strong rebound in local patient volumes and were net profit positive for that month".

In June, occupancy in IHH's home markets recovered to between 40 and 60 per cent, compared to pre-Covid-19 levels of 65 to 70 per cent.

"We have seen this progressive recovery in occupancy continue across July and August," he added.

IHH said it expects the impact from the Covid-19 pandemic to continue for the rest of FY2020, "especially if there are further disruptions from subsequent outbreaks and renewed lockdowns".

However, it will continue to mitigate the impact by "creating new revenue streams, improving case mix, keeping tight cost and capital discipline while supporting governments". It expressed optimism that it will remain resilient.

It has, for example, launched telemedicine across its key markets to connect with patients virtually. It has also taken in non-Covid-19 patients from public hospitals in Singapore and Hong Kong to make good the short-term decrease in patient volumes and revenue.

Dr Loh said: "Our strategy, underpinned by our commitment to provide unrivalled care and build trust, will enable us to capture emerging opportunities, and come out of this stronger."

Shares of IHH Healthcare last traded on Aug 25 at S$1.79.