Tuesday 19 Mar 2024
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This article first appeared in The Edge Financial Daily, on February 24, 2017.

 

KUALA LUMPUR: IHH Healthcare Bhd, which feels the heat of currency fluctuations, is stepping up efforts to de-risk its foreign currency exposure.

The healthcare group incurred RM244.59 million foreign exchange (forex) loss for the quarter ended Dec 31, 2016 (4QFY16) compared to forex gain of RM121.2 million a year ago. The massive forex loss has pulled IHH into its first-ever quarterly loss of RM42.51 million since the group’s listing in 2012.

Speaking to the media at a conference call yesterday, chief financial officer Low Soon Teck said IHH is looking to convert some of the US dollar- and euro-denominated loans to the local currencies of the countries where the group has operations.

“Previously, we were unable to do so because there was a lack of liquidity in Turkish lira onshore to borrow and they are only available for a very short term. I think the market for lira is opening up as the central bank is pumping the economy,” he said.

“The option is now available to us. We are looking at converting foreign currency loans into local currency loans and this will de-risk some of the forex issues,” he added.

Over the past one year, the Turkish lira has depreciated more than 22% against the US dollar.

Meanwhile, IHH managing director and chief executive officer Dr Tan See Leng said the ParkwayHealth Chengdu Hospital, which the group will be investing 900 million yuan (RM582.3 million) in, is expected to be operational in the 1Q of 2018.

In December last year, IHH secured a business licence to form a joint venture in China with Shanghai Broad Ocean Investments Co. It holds a 70% stake in ParkwayHealth Chengdu Hospital.

Tan also revealed that Gleneagles Hong Kong Hospital, which will have a 500-bed capacity, will start operation next month.

The group reported a net loss of RM42.51 million for 4QFY16, compared to a net profit of RM415.83 million a year ago.

IHH proposed a first and final single-tier dividend of three sen per share, which will be paid on a date to be announced.

For the full FY16, IHH’s net profit declined 34.4% to RM612.35 million from RM933.9 million in FY15. Revenue grew 18.5% to RM10.02 billion from RM8.46 billion.

Moving forward, Tan said IHH remains confident about the sustained demand for quality private healthcare services in its home and growth markets, especially in India and China.

“In 2017, the group will continue to develop and enhance its service offerings in existing hospitals and ramp up hospitals opened in 2015 to achieve optimal operating leverage, while integrating its newly acquired assets,” he said.

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