IHH recovers from loss with $34.15m Q4 profit

It continuously ramped up its hospitals that opened in 2017.

For the fourth quarter, IHH was revived from a $14.34m (RM42.51m) loss to a profit of $34.15m (RM101.26m). For the full year, its profits leapt 58% from $206.54m (RM612.35m) to $327.16m (RM969.95m).

Revenue jumped 10% in Q4 thanks to organic growth from its existing operations, and the continuous ramp up of the hospitals opened in 2017. The ramp up of operations of Tokuda and City Clinic Group in Bulgaria post-acquisition in June 2016 also contributed to the increase in the Group’s Q4 2017 revenue.

IHH recognised $4.42m (RM13.1m) gain on divestment of Parkway Life REIT’s investment properties in Q4 2016, whilst there was no such divestment gain in Q4 2017. The increase in Q4 earnings was partially eroded by start-up costs from the Gleneagles Hong Kong Hospital, and higher operating and staff costs.

Parkway Pantai’s Singapore hospitals saw an overall 6.3% increase in inpatient admissions to 19,319 in Q4, driven by the increase in both local and foreign patients. Revenue per inpatient admission in Singapore increased 6.2% to $9,943 (RM29,469).

The continuous ramp up of Acibadem Atakent University Hospital, Acibadem Altunizade Hospital (opened in March 2017) and Tokuda and City Clinic Group in Bulgaria (acquired in June 2016) boosted revenue growth.

IMU Health’s Q4 2017 revenue increased 2% to $19.9m (RM59m) due to the shortening of the semester for some courses.

IHH said it will drive growth by investing organically to consolidate its position in its home markets. “With a pipeline of expansion projects in Malaysia and Turkey, the Group has sufficient capacity to meet demand, which would drive revenue growth.”

“The Group expects higher costs of operations arising from wage inflation as a result of increased competition for trained healthcare personnel in its home markets. While such sustained cost pressures may potentially reduce the Group’s EBITDA and margins, the Group expects to mitigate these effects through improvements in case mix and tight cost control. In addition, the Group will increasingly leverage technology to enhance our service offerings. This includes rolling out various initiatives to improve the efficiency of the operations, transform healthcare service delivery and improve clinical outcomes,” it added.