Friday 29 Mar 2024
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KUALA LUMPUR (May 26): Healthcare services provider IHH Healthcare Bhd’s net profit for the first quarter ended March 31, 2022 (1QFY22) rose 31% to RM493.26 million from RM375.62 million a year ago, on higher revenue offset by higher operating costs.

Revenue for 1QFY22 rose 6% to RM4.16 billion from RM3.94 billion in 1QFY21, according to IHH’s filing on Thursday (May 26).

It noted that the 4% rise in earnings before income tax depreciation and amortisation (EBITDA) in 1QFY22 to RM996.5 million was driven by higher revenue, offset by higher staff costs, higher other operating expenses, lower government grant income and higher base last year, which included a RM15.6 million gain on the disposal of an investment property. 

“The group’s 1QFY22 EBITDA margins was on par with 1QFY21 at 24%,” it said.

Excluding exceptional items, its profit after tax, minority interest (PATMI) rose 21% to RM407.4 million from RM335.83 million on the back of a higher EBITDA, lower depreciation expense and lower net interests costs.

Earnings per share rose to 5.36 sen in 1QFY22, from 4.04 sen a year ago.

Meanwhile, net asset per share slipped to RM2.54 as at March 31, 2022 from RM2.55 as at end FY21.

For its Hospital and Healthcare segment — the group’s main revenue and profit contributor — revenue in 1QFY22 increased 6% to RM4.06 billion, while EBITDA increased 5% to RM974.0 million.

IHH attributed the growth to recovery in local patient revenue, contribution from Covid-19 related-services rendered and continuous ramp-up of operations at Gleneagles Hong Kong Hospital.

Singapore, which contributed the bulk of the group’s revenue and EBITDA, saw hospital inpatient admissions fall 6% to 15,852 in 1QFY22, while its revenue per inpatient admission increased 20.2% to RM43,011, as beds were allocated to Covid-19 patients and a case-mix of more acute patients seeking treatment at the Singapore hospitals.

Meanwhile, Malaysia hospital inpatient admissions increased 19% to 41,671 in 1QFY22, while its revenue per inpatient admission decreased 1.7% to RM9,780.

“Recovery of foreign patient volume remained soft for Singapore, Malaysia and India while foreign patient volume in Turkey and Europe continued to increase,” it added.

On a sequential basis, revenue and EBITDA fell 7% and 11%, respectively. EBITDA margin decreased slightly from 25% in 4QFY21 to 24% in 1QFY22.

On its prospects, while the group said it is confident of its long term growth trajectory, it warned that with global rising inflation, most costs are expected to increase over time.

“The Group will continually maintain a tight rein on costs and make appropriate price adjustment, yet continually building trust with our patients and delivering excellent clinical outcomes,” it said in the notes to its financials.

It flagged that Turkey, where its operates via its unit Acibadem Holdings, is expected to be classified as a hyper-inflationary economy. Hence, Acibadem Holdings may have to apply IAS29 Financial Reporting in Hyperinflationary Economies in 2QFY22.

“The Group is in the midst of evaluating the implications on its financial reporting. Overall, there will be some impact on the Group from the global inflationary trend.

“However, with the Group’s strong financial position and cash flow, operational resilience and continued focus on delivering its strategy, the Group is confident that it will be able to ride out the short-term heads winds and deliver long-term sustainable growth for all stakeholders,” it said.

Separately, in a press release, IHH’s managing director and CEO Kelvin Loh said, “As borders reopen and restrictions lift, 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.”

Shares in IHH ended 6 sen or 0.93% higher at RM6.49 on Thursday (May 26), valuing the group at RM57.13 billion. 

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