SINGAPORE (Feb 28): Private healthcare operator IHH Holdings’ earnings plummeted 92% to RM40.6 million ($13.4 million) in 4QFY2019 ended December, from RM509.4 million a year ago.
The weaker bottomline comes from higher net interest expenses, depreciation of new hospitals, foreign exchange losses.
Notably, IHH booked a surge in finance costs from its acquisition of Fortis – India’s second largest hospital chain in 2018 – and the swap of non-Lira to Lira loans for its operations with Acibadem, a Turkish healthcare line.
Revenue for the quarter was up 21% to RM3.8 billion. This comes from an organic growth in its existing operations and the ramp up of its Gleneagles Hong Kong Hospital and Acibadem Altunizade Hospital in Istanbul.
Additionally, income was beefed up by an increased capacity from its Acibadem Maslak Hospital and contributions from Kedah-based Amanjaya and Fortis which were both acquired in 2018.
Segmentally, its Singapore operations generated the higher revenue of RM424.8 million. This was followed by its Acibadem business in Turkey and Europe which had an income of RM246.8 million. Meanwhile revenue slowed from Malaysia (RM171.0 million) and India (RM90 million) while that Greater China recorded a loss of RM68.9 million.
On constant currency terms and excluding the effects from its adoption of the Malaysian Financial Reporting Standard (MFRS 16) on leases, revenue would have grown 22%, the group notes in a regulatory filing on Friday.
Overall, IHH’s earnings for FY2019 was down 12% to RM551.5 million, from RM627.7 million a year ago following impairments to its global hospitals in 4QFY2019.
This translates to earnings per share (EPS) of 5.28 cents on a fully diluted basis, 19% down from the previous year’s 6.45 cents.
Revenue for the year was up 29% to RM14.9 billion, from an organic growth in operations.
Other operating income was down 17% to RM308.6 million following the adoption of MFRS 16.
As at end December, cash and cash equivalents stood at RM2.6billion, from RM5.7billion in FY2018.
IHH’s board has declared a final dividend of RM 4 cents, up from RM 3 cents in FY2018, which will be paid out on 30 April.
“Our operational core continued to perform well and remained resilient in 2019,” reflects Kelvin Loh, IHH’s Managing Director and CEO.
The group is now pursuing a new strategy for the next decade. This involves expanding its establish clusters in metro areas to achieve greater economies of scale, while delivering better patient services, says Loh.
In line with this, the group is expanding the number its hospitals – with the first two – a greenfield project in China and an expansion in Malaysia – to complete this year.
Two other projects – an expansion in Malaysia and a greenfield initiative in Yangon – are slated for completion in the next three years.
Furthermore, the group will also prioritise returns by reviewing its portfolio and divesting under-performing assets outside its focus clusters, to ensure an efficient deployment of capital that generates higher returns.
Lastly, it is looking to deepen synergies with global partners to enjoy cost savings.
The most important mission, is to maximise its patient care capabilities, in response to quality treatment during the Covid-19 outbreak, says Loh.
While the group has not handled suspected cases just yet, has stepped up its safety initiatives at its hospitals.
Shares at IHH Healthcare were down 0.53% to close at $1.87 on Friday.
