SINGAPORE (June 29): Private healthcare operator IHH Healthcare reported a net loss of RM319.8 million ($103.8 million) for 1Q20, from the RM89.5 million profit a year ago.
This quarter’s loss was attributable to impairment on the remaining goodwill of RM400.5 million from an investment made into Global Hospitals in India, and realisation of RM60.0 million foreign currency translation losses relating to Khubchandani Hospitals in India upon substantive liquidation.
The quarter saw a loss per share at 3.90 sen, compared to the earnings per share of 0.78 sen a year ago.
Revenue for 1Q20 fell 2% y-o-y to RM3.6 billion, due to a higher base on 1Q19, when the group recorded a one-off trustee management fee income of RM28.5 million.
The group says revenue was impacted by the Covid-19 outbreak in March, on lower foreign patient volumes, due to the travel restrictions implemented across the countries the group operates in.
This was partially mitigated by the group’s provision of Covid-19-related services such as temperature screening at Singapore’s borders, and screening services and laboratory testing services in countries including Singapore, Malaysia, Hong Kong, Turkey, and India.
PATMI (excluding exceptional items) rose 1% to RM189.4 million on lower net interest expenses, after the group repaid its bank loans in 1H19. The increase was also attributable to lower foreign exchange losses resulting from IHH’s ongoing forex management plan.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased 10% y-o-y on lower revenue and costs that were incurred to implement Covid-19 measures at its hospitals and healthcare facilities.
In Singapore, the group’s revenue fell 1% y-o-y to RM1.0 billion. EBITDA fell 5% y-o-y to RM328.2 million. Inpatient admissions declined 9.6% y-o-y. Revenue intensity (or average revenue per inpatient admission) increased 10.9% y-o-y to RM35,236.
The group’s Malaysia segment saw a 3% y-o-y growth in revenue to RM555.4 million. EBITDA, however, fell 8% to RM149.6 million. Inpatient admissions decreased 3% y-o-y. Revenue intensity grew 4.2% y-o-y to RM7,231.
In India, revenue declined 8% y-o-y to RM750.6 million, while EBITDA rose 1% to RM69.1 million. Inpatient admissions decreased 3.0%, and revenue intensity dipped 0.1% y-o-y to RM6,476.
IHH’s Gleneagles Hong Kong Hospital saw a slight increase in losses even with higher operating and staff costs as it continues to ramp up because it did not see any decline in inpatient volume. Its Gleneagles Chengdu Hospital, which commenced operations in late October 2019, saw its ramp up hampered by the ongoing pandemic.
Revenue in Turkey decreased 1% to RM955.8 million. EBITDA declined 7% to RM217.3 million due to the weaker lira against the ringgit. Inpatient admissions decreased 4.4% y-o-y, while revenue intensity grew 14.8% y-o-y to RM9,098 on price adjustments for inflation. More complex cases were also undertaken for the quarter.
IMU Health’s revenue increased 9% y-o-y to RM67.3 million, due to higher student intake for some courses and higher seminar income from a major conference it organised. Accordingly, EBITDA increased 11% to RM28.5 million.
PLife REIT’s revenue rose 11% y-o-y to RM37.7 million. The REIT’s EBITDA increased 2% y-o-y to RM70.4 million due to rent contribution from properties acquired in 4Q19.
In its outlook statement, IHH Healthcare says subsequent waves of Covid-19 outbreaks and renewed lockdowns may further dampen its performance.
However, the group is diversifying into new revenue streams through planned growth in areas such as diagnostics, laboratory testing and telemedicine.
Following the easing of movement restrictions in June, IHH Healthcare has started to see overall recovery in domestic patient volumes, and expects numbers to increase progressively.
Shares in IHH Healthcare closed 3 cents higher, or 1.7% up, at $1.78 on Monday.
