IHH's Q2 net profit falls 48% on absence of one-off gain

Singapore

PRIVATE healthcare provider IHH Healthcare's second-quarter net profit slid 48 per cent to RM165.11 million (S$54.9 million) in the absence of a one-off divestment gain that was chalked up in the corresponding quarter a year ago.

Q2 FY17 included a one-off gain of RM241.1 million from the divestment of Apollo Hospitals.

Revenue for the three months ended June 30, 2018, dipped 4 per cent to RM2.66 billion, due to the strengthening of the Malaysian ringgit against the currencies in other countries in which IHH operates, such as Turkey.

On constant currency terms, revenue would have grown 14 per cent, it said, due to sustained organic growth at existing operations and the continued ramp-up of Gleneagles Hong Kong and Acibadem Altunizade, which opened in March 2017.

Earnings per share for the quarter fell to 1.75 sen, down from 3.84 sen previously.

For the six-month period, net profit slumped 72 per cent year-on- year to RM222.34 million, also affected by foreign currency translations, while revenue rose one per cent to RM5.51 billion.

IHH managing director and chief executive officer Tan See Leng said the group is watching developments involving the Turkish lira closely and is accelerating plans to restructure and reduce Acibadem's foreign debt to manage its exposure to currency volatility.

Earlier this month, shareholders of India's Fortis Healthcare approved a subscription of shares by IHH for a 31.1 per cent stake in Fortis, fulfilling a condition for IHH to make an offer for a further 26 per cent. In total, IHH could spend more than 73.5 billion rupees on the acquisition.

Shares in IHH closed at S$1.85 on Tuesday, down one cent.