IHH Q1 net profit rises to RM493.26 mln on increase in patient volumes, lower net finance costs

KUALA LUMPUR: IHH Healthcare Bhd posted a higher net profit of RM493.26 million in the first quarter ended March 31, 2022 (Q1 FY2022) from RM375.62 million a year earlier on an increase in patient volumes and lower net finance costs.

Revenue rose six per cent to RM4.16 billion year-on-year (y-o-y) as the group saw growth in its key markets, with a rebound in domestic patient revenue, contribution from delivery of Covid-19 related services and a continued ramp-up of operations at Gleneagles Hong Kong Hospital.

The acquisitions of DDRC SRL Diagnostics Private Ltd on April 5, 2021 and General Hospital Acibadem Bel Medic on July 20, 2021, also contributed to the increase.

These were partially offset by the effects of disposal of Continental Hospitals Private Ltd on Dec 14, 2021, temporary closure of all clinics in China for a period during March 2022 imposed as a result of a spike in COVID-19 cases in Shanghai, and the effects of a weakening lira on the group’s revenue from its operations in Turkey.

IHH’s basic earnings per share notched 5.36 sen compared with 4.04 sen, it said in a filing with Bursa Malaysia.

In a statement today, managing director and chief executive officer Dr Kelvin Loh said as borders reopen and restrictions gradually lifted, IHH is seeing a firm recovery in its non-Covid business as domestic and foreign patients return.

“In the short term, we may expect to see some headwinds with the melt-off of Covid-19 related revenues as well as from global inflationary pressures.

“However, we remain confident that our longer-term growth trajectory remains intact,” he said.

The statement said IHH plans to focus on strategic pillars: Trust, Synergy, and Growth underpinned by a compelling Environmental, Social and Governance agenda: to drive its operational and financial performance in 2022.

It added that the group would leverage synergies from its international network to achieve cost savings, acquire strategic assets to drive capital-efficient growth through its cluster strategy and build distinct platforms such as laboratories businesses.

“The group will continue to roll out its digital transformation initiatives and allocate approximately RM400 million for investments over the next three years to innovate and deliver healthcare capabilities digitally,” it said.

With global rising inflation, most costs are expected to increase over time but the group said it would continue to maintain a tight rein on costs and make appropriate price adjustments.

Notwithstanding that the group is managing the effects of rising inflation on its operations, Turkey is expected to be classified as a hyper-inflationary economy.

As such, Acibadem Holdings may have to apply IAS29 Financial Reporting in Hyperinflationary Economies in Q2 2022.

The group is in the midst of evaluating the implications of its financial reporting.

At close, shares of IHH rose 0.93 per cent to RM6.49 with 3.04 million shares transacted. -Bernama