IHH suf­fers from lira pain

Profit from Turk­ish unit Aciba­dem down by a quar­ter in Q2

The Star Malaysia - StarBiz - - Front Page -

PE­TAL­ING JAYA: The plung­ing Turk­ish lira is caus­ing IHH Health­care Bhd pain.

The com­pany said profit con­tri­bu­tion from 60%-owned Aciba­dem Hold­ings, a lead­ing health­care provider based in Turkey, dropped by a quar­ter in the three months ended June 30 due to the un­favourable cur­rency ex­change rate.

This, cou­pled with the lack of a one-time gain that had boosted the group’s per­for­mace in the same quar­ter last year, con­tributed to the sharp drop in IHH’s lat­est quar­terly earn­ings.

Net profit in the sec­ond quar­ter ended June 30 was al­most halved at RM165.1mil com­pared with the RM316.6mil made a year ago. Rev­enue was lit­tle changed at RM2.66bil.

Earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA), ex­change dif­fer­ences and other non-op­er­a­tional items edged down by 1% to RM527.9mil.

“The stronger ring­git had a trans- la­tional ef­fect on our fi­nan­cials, and must be viewed against a strong 2017 sec­ond quar­ter which in­cluded a one-off di­vest­ment gain,” manag­ing di­rec­tor and CEO Dr Tan See Leng said in a state­ment.

The EBITDA con­tri­bu­tion from Aciba­dem, the group’s sec­ond-largest op­er­at­ing unit, de­clined 25% to RM108mil in the sec­ond quar­ter. Main unit Park­way Pan­tai, which owns hos­pi­tals in Malaysia, Sin­ga­pore, Hong Kong and In­dia, con­tributed RM349mil.

“In Turkey, we are watch­ing lira devel­op­ments closely and are ac­cel­er­at­ing plans to re­struc­ture and re­duce Aciba­dem’s for­eign debt to man­age our ex­po­sure to cur­rency volatil­ity,” Tan said.

The lira, since June, has de­pre­ci­ated by at least 40% against the US dol­lar, euro and the ring­git.

“We have de­ferred all ex­pan­sion cap­i­tal ex­pen­di­ture for Aciba­dem,” Tan added. The group’s im­me­di­ate fo­cus is to wrap up the ac­qui­si­tion of For­tis Health­care Ltd in In­dia.

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