IHH posts lower Q3 earnings of RM82m
KUALA LUMPUR: IHH Healthcare Bhd recorded third quarter earnings of RM82.09mil, less than half the RM173.3mil posted in the same quarter a year ago, as it was impacted by increased depreciation, amortisation and finance costs from the opening of two new hospitals earlier in the year.
Year to date, net profit rose 32.65% to RM868.7mil, from RM654.86mil in the year-ago period.
Revenue for the quarter under review rose 14.7% to RM2.8bil, bringing nine-month revenue this year to RM8.26bil, compared to RM7.39bil previously.
IHH said the improved revenue in Q3 was due to sustained growth in inpatient admissions and revenue intensity across most home markets and the ramp up of new hospitals that opened in March 2017.
Two acquisitions in June 2016, Tokuda Group and City Clinic Group in Bulgaria, also contributed to the higher revenue.
IHH said the cost of opening the new hospitals in Hong Kong and Istanbul in March this year were within its start-up expectations.
As at end-September 2017. IHH maintained a cash balance of RM5.8nil and an improved net gearing of 0.05 times, from 0.21 times in September 2016.
Earnings per share for the three quarters so far this year stood at 10.35 sen versus 7.96 sen a year earlier.
IHH's healthcare provider subsidiaries - Parkway Pantai and Acibadem Holdings - reported revenue increases on stronger performances from their hospitals.
Parkway Pantai reported a 14% increase in revenue in Q3 on sustained organic growth from its hospital business as well as a ramp up in hospitals in Singapore, Malaysia and Hong Kong.
Similarly, Acibadem, Turkey's leading private healthcare provider, posted a 18% increase in revenue for the quarter.
IHH's medical education arm, IMU Health, recorded 9% revenue growth on-year as it adjusted tuition fees and shortened certain courses.
Healthcare-related property investment trust, PLife REIT, reported a 1% decline in external revenue with a weaker Japanese yen verus the Malaysian ringgit impacting translated rental income.
Looking forward, IHH said there will be sustained demand for quality private healthcare in its home markets and key growth market of Greater China.
It added that it expects to face cost pressures including wage inflation, rising purchasing costs, ad higher pre-operating and start-up costs from new operations.
"To mitigate these effects, IHH will remain prudent in its cost management, undertake ways to improve the mix of higher revenue intensity cases and ramp up new facilities to achieve optimal operating efficiencies," it said.
WIth regards to geopolitical and currency risks, IHH said it adopts natural hedges while efforts are ongoing to reduce risks of currency exposure for Acibadem.
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