SINGAPORE (May 30): IHH Healthcare reported 1Q earnings of RM89.5 million ($29.4 million), 56% higher from RM57.2 million a year ago on the back of stronger operational performance.
Revenue for the quarter grew 28% to RM3.6 billion from RM2.9 billion previously.
The group attributes this to sustained organic growth at existing operations and the sustained ramp-up of Gleneagles Hong Kong Hospital and Acibadem Altunizade Hospital, which both opened in March 2017.
As a result of the ramp-up of Gleneagles Hong Kong and decreasing start-up losses due to operating leverage, Parkway Pantai registered a strong 49% revenue increase to RM2.6 billion.
Acquisitions Amanjaya Specialist Centre and Fortis Healthcare businesses in 2018 also contributed to an increase in both 1Q revenue and earnings, says the group.
Notably, a one-off RM28.5 million trustee management fee income from RHT was booked over 1Q in relation to the disposal of RHT assets.
Adopting the MFRS 16, leases accounting standard from the start of 2019 has also helped to bosot 1Q EBITDA as the group recognised depreciation on right-of-use (ROU) assets instead of recognising operating lease expense.
On a constant currency basis and excluding the effects of the change in accounting treatment, IHH’s revenue and EBITDA grew by 40% and 31% compared to the respective 28% and 34% growth.
Excluding exceptional items, group profit after tax and minority interests rose 56% to RM188.4 million compared to RM120.5 million a year ago.
Looking ahead, IHH managing director and CEO Tan See Leng says he expects Fortis to continue being accretive to the group it the years to come.
“Our decisive actions in Turkey to pare down US$250m of non-Lira debt last month will reduce forex volatility on earnings from the second quarter onwards. In Greater China, we ramped up operations in Gleneagles Hong Kong with new service offerings catering to demand, while the development of Gleneagles Chengdu and Gleneagles Shanghai continues on track,” he adds.
Shares in IHH closed 1.1% lower at $1.79 on Thursday.
