IHH Healthcare Q2 net profit up 33.4% to RM209.1mil

KUALA LUMPUR: IHH Healthcare Bhd’s second quarter ended June 30, 2014 net profit rose 33.4% to RM209.1mil from RM156.75mil a year ago.

In a statement to Bursa Malaysia on Thursday, the healthcare group said its revenue rose 11% to RM1.865bil from RM1.68bil a year ago.

Earnings per share for the period stood at 2.56 sen compared to 1.93 sen a year earlier.

For its first half year, the group’s net profit rose 29.6% to RM368.15mil from RM284.03mil a year ago while revenue was up 9.6% to RM3.622bil from RM3.304bil a year ago.

The group said its second quarter revenue increased due to an on-year growth in patient volume and revenue intensity of existing operations and the commencement of operations of Acibadem Atakent Hospital and Pantai Hospital Manjung in January 2014 and May 2014 respectively.

Parkway Pantai’s revenue grew 15% to RM1.107bil in Q2 2014 whilst its ebitda grew 21% to RM296.7mil in Q2 2014.

“Parkway Pantai’s strong performance was the result of the continuous ramp up of its Mount Elizabeth Novena Hospital in Singapore as well as from its other hospitals and healthcare businesses,” it said.

Meanwhile, Acibadem Holdings’ revenue and ebitda both grew by 4% to RM675.6mil and RM123.6mil respectively in Q2 2014.

“Excluding the effects of the depreciation of the Turkey Lira on translation of Acibadem Holdings’ results, Acibadem Holdings’ Q2 2014 revenues increased by 12% whilst its Q2 2014 ebitda increased by 13% over last year.

“Acibadem Holdings’ Q2 2014 ebitda grew double-digit as compared to last year despite the RM2.8mil ebitda start-up losses incurred by the newly opened Acibadem Atakent Hospital,” it said.

IHH noted that IMU Health’s revenue grew 13% to RM57.6mil in Q2 2014 whilst its ebitda increased by 17% to RM23.8mil in Q2 2014.

“IMU Health’s revenue growth was driven by higher student intake and increase in course fees for IMU Health’s medical and nursing programmes,” it added.

PLife Reit’s external revenue grew 37% to RM24.7mil in Q2 2014 whilst its ebitda grew 17% to RM53.2mil in Q2 2014.

It said that PLife Reit’s external revenue grew on the back of rental income contribution from the Japanese properties acquired in the second half of 2013 and first quarter of 2014.

Moving forward, the group expects higher staff costs and other inflationary pressures to affect the group for the rest of the year.

“While such sustained cost pressures may reduce the group’s ebitda and margins, the group expects to mitigate these effects through price adjustments and through its operating leverage as volumes continue to grow and margins of new hospitals improve with the ramp up of inpatient admissions,” it said.

IHH said it continues to actively monitor its currency risks and will take proactive steps to minimise such risks by borrowing in the functional currency of the borrowing entity or by borrowing in the same currency as its foreign investment (i.e. hedge of net investments).

“Acibadem Holdings, which holds non-Turkish Lira denominated loans, will monitor its liquidity position to hedge its cash flows by conserving hard currency receipts from its medical travellers to service these debts and interest payments.

“The group is confident that its strong balance sheet and operating cash flows would enable it to support its expansion plans,” it said.

Barring unforeseen circumstances, the group expects that it would continue to achieve earnings growth for the year ahead.