IHH Healthcare’s 1Q earnings jump 31% as patients return

by AUFA MARDHIAH / TMRpic

IHH Healthcare Bhd posted an improved first quarter (1Q) financial on the back of a rebound in its core operations as domestic patient’s revenue improved and contribution from delivery of Covid-19 related-services.

Revenue for the quarter grew 6% year-on-year (YoY) to RM4.2 billion as the healthcare provider saw a boost from its Gleneagles Hong Kong Hospital as well as recent acquisitions namely DDRC SRL Diagnostics Pvt Ltd on April 5, 2021, and General Hospital Acibadem Bel Medic on July 20, 2021.

Earnings for the quarter grew 31% YoY to RM493.3 million on higher patient volumes and lower net finance costs. No dividends was declared.

IHH Healthcare MD and CEO Dr Kelvin Loh said the strong performance in the quarter reflects the group’s execution of its “Care for Good” strategy — which prioritises returns and capital efficient growth for stakeholders. 

“We are nimbly adapting to the new normal and are pursuing new growth opportunities for the group. One example is our laboratories segment, which we have accelerated from the onset of the Covid-19 pandemic. We see growth in its underlying core business and will work towards becoming a global laboratories service provider, backed by our deep clinical knowhow and capabilities.

“As borders reopen and restrictions lifted, we are seeing a firm recovery in our 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 in a statement today.

Return on equity was 8.8% for the period compared to 8.4% in the preceding quarter.

IHH Healthcare’s Malaysian operations continued to recover with higher inpatient volumes. IHH Malaysia’s revenue grew by 15% YoY to RM704.6 million on increased contribution from inpatient admissions of local patients (19%) despite the drop in revenue (1.7%) with an average occupancy of 52% for the quarter. Pretax earnings grew 28% to RM193.6 million in the quarter, IHH Healthcare noted in a release today. 

IHH Healthcare’s other business segments also recorded a positive growth for 1Q22. IHH Healthcare’s laboratories revenue increased 8% to RM463.7 million while Ebitda decreased 26% to RM102.4 million due to lower Covid-19 test revenues and from a high base at the peak of the pandemic in 1Q21.

IMU Health’s revenue grew 4% to RM62.2 million while Ebitda decreased 2% to RM21.9 million. The increase in revenue was due to higher student population and revenue recognised over a shorter course period for certain programmes.

PLife REIT’s external revenue was 4% higher YoY while its Ebitda was down 18% YoY. The higher revenue was contributed by two nursing homes acquired in July 2021 and one nursing home property acquired in December 2021, partially offset by the disposal of P-Life Matsudo on Jan 29, 2021, and the depreciation of the Japanese yen.