IHH suffers from lira pain
Profit from Turkish unit Acibadem down by a quarter in Q2
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.