IHH net profit falls to RM612mil
PETALING JAYA: IHH Healthcare Bhd posted revenue of RM2.63bil for the fourth quarter ended Dec 31, 2016, bringing its full year revenue to RM10.02bil, which was 18.4% higher than the corresponding period last year.
However, the group had three exceptional items booked during the quarter, which contributed to its net loss of RM42.51mil.
Its FY16 net profit fell 34% from RM933.9mil to RM612.35mil.
The three exceptional items booked comprised the RM132.7mil investment in Gleneagles Khubchandani Hospital in India, RM53.6mil settlement for value-added tax claims in Turkey and RM335.2mil worth of unrealised forex losses on translation of non-Turkish Lira borrowings.
Speaking during a teleconference call yesterday, IHH managing director and CEO Dr Tan See Leng said that the group is looking to resolve the foreign exchange loss issue by converting its foreign currency-denominated loan to local lira currency loan.
Apart from that, Tan said that the resilient core performance for the financial year was underpinned by the group’s differentiated strategy to prudently refine and rebalance its portfolio to optimise long term returns.
“During the year, we pivoted from greenfield developments to making transformational acquisitions, and now we are consolidating our India platform further by rebranding all our global hospitals facilities under the IHH ‘Gleneagles’ brand to drive greater brand equity.
“We look forward to opening our new flagship hospital, Gleneagles Hong Kong, some time next month, which will place the group in a good position for its next stage of growth.
“We have sufficient staff to begin operations in Gleneagles Hong Kong next month, and we target to have 1000 staff eventually,” said Tan.
Inpatient admissions at its Singapore hospitals grew 4.8% year-on-year to 18,174, driven by an increase in local patients, while inpatient admissions at its Malaysia hospitals increased 3.6% to 47,318.
Average revenue per inpatient admission or revenue intensity rose 1.5% to RM28,189 in Singapore and improved by 12.3% to RM6,151 in Malaysia as the group continued to take on more complex cases.
India recorded the highest numbers in inpatient admissions and revenue intensity with inpatient admissions growth of 7.7% to 15,838 while revenue intensity improving by 15.5% to RM7,997.
Going forward, IHH expects to face increasing cost pressures including pre-operating and start-up costs at its new hospitals, wage inflation from increasing global competition for healthcare talent, and rising purchasing costs from the strengthening US Dollar.
The group aims to mitigate these cost pressures through prudently managing costs, improving operational efficiencies and focusing to improve the mix of higher revenue intensity cases.
The board of directors of the group recommended a first and final dividend of 3 sen per ordinary share for FY16.