IHH prepares for normalisation post-Covid-19

This is as the group starts to see restrictions easing globally amid the Omicron’s threat 

by NUR HANANI AZMAN / pic source: ihhhealthcare.com

IHH Healthcare Bhd expects in-patient revenue intensity to normalise when the easing of restrictions with a return of elective treatments to its hospitals. 

Despite the spread of Omicron worldwide, the healthcare group is starting to see restrictions easing globally, hence, expect a continued return of its core non-Covid business, as proven and reflected in the recovery in Turkey and India. 

IHH MD and CEO Dr Kelvin Loh (picture) said with the world emerging from the Covid-19 pandemic, there may be short-term headwinds as Covid-19 services taper off. 

“We are cognisant of rising staff costs and inflationary pressures, but remain disciplined and will continue our journey of improving return on equity as normalcy returns. Long-term mega-trends will remain intact and favourable, business-as-usual will return and we see continued growth,” he said in an online media briefing yesterday. 

IHH posted a net profit of RM1.86 billion for the financial year ended Dec 31, 2021 (FY21), compared to a net profit of RM289 million recorded in FY20 due to continued growth across the countries it operated in with patient volumes picking up since June 2020. 

Revenue for the year rose to RM17.13 billion from RM13.40 billion in FY20, its exchange filing yesterday noted. 

The acquisition of Bel Medic in Serbia in July 2021 and DDRC SRL in India in April 2021 also contributed to the increase. 

Malaysia operations revenue rose 20% year-on-year to RM742.9 million due to increased contribution from in-patient admissions, undertaking more complex cases and performing Covid-19 tests. “In-patient admissions increased 12% while revenue intensity grew 8.3%. For the fourth quarter of 2021 (4Q21), average occupancy was at 52%,” Loh said.

IHH’s 4Q21 net profit increased to RM453.6 million from RM419.36 million in 4Q20, while revenue rose RM4.47 billion from RM3.77 billion in 4Q20. 

On IHH’s plan to continue growing its 31%-owned associate Fortis Healthcare Ltd, Loh said the group cannot predict the timeline for the mandatory takeover offer (MTO) to begin but continues to be hopeful of a positive outcome sometime soon. 

“As per our legal advice, we are under no obligation to revise the MTO price from 170 Indian rupee (RM9.54) per share. We will wait for the outcome on the Securities Commission’s order and then the board will consider its various options. 

“As we hold the 31.1% stake, we maintain majority control at the board and remain the largest shareholder. We are very happy with the performance of Fortis,” he added. 

The board has declared a first and final dividend of six sen per share, payable on April 29, 2022. Entitlement date was fixed on March 31, 2022. 

IHH share price closed unchanged at RM6.30 yesterday, valuing the group for RM56.4 billion. 

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