KUALA LUMPUR (Aug 27): IHH Healthcare Bhd has narrowed its losses to RM120.64 million or 1.64 sen per share in the second quarter ended June 30, 2020 (2QFY20), from RM319.79 million or 3.9 sen per share in the preceding quarter, on lower tax and in the absence of impairment on goodwill of its Global Hospitals arm in India.

The group however noted that excluding exceptional items, it booked a loss of RM84.16 million for 2QFY20, which was a swing from a profit of RM189.35 million in 1QFY20, on the back of weaker performance across all fronts, except for Parkway Life REIT (PLifeREIT) which held steady on forex gains.

Revenue fell 27.85% to RM2.57 billion in 2QFY20, from RM3.56 billion in 1QFY20, again as all businesses declined except for PLifeREIT.

Year-on-year, IHH swung to a net loss from a net profit of RM184.99 million or 1.86 per share in 2QFY19, while revenue fell 29.63% from RM3.65 billion.

“We saw the worst impact in April and May,” said IHH, which has operations in Malaysia, Singapore, India, Turkey, China and Hong Kong.

“Amid the pandemic, patients postponed semi-elective and elective during lockdown, while foreign patients — which make up between 5% and 25% of revenue — could not travel to our facilities,” it added.

For the six-month period ended June 30, IHH booked a net loss of RM440.43 million or 5.54 sen per share, from profit of RM274.5 million or 2.63 sen per share in the same period last year. Half-year revenue dropped 16.02% to RM6.12 billion, from RM7.29 billion.

On prospects, IHH pointed to recovery in home markets occupancy to 40%-60% in June from 65%-70% pre-Covid 19. It also reported a net profit in that month.

“We have seen this progressive recovery in occupancy continue across July and August,” it added.

To mitigate the short-term impact of Covid-19, IHH took front row seats by undertaking screening tests and caring for Covid-19 patients, while it also collaborated with governments to manage care facilities and border screening in Singapore. A telemedicine service was also launched in key markets, it said.

On prospects, IHH maintains that it is well prepared to ride out the pandemic.

Still, it expects “continued impact” from Covid-19 for the rest of the year, margin squeeze on fixed costs as patient volume fluctuates, and higher costs arising from supplies to operate amid the pandemic — although cost management has been a big focus.

The group expects to defer about 30% of its capital expenditure to beyond 2020, “In addition, the construction of Parkway Shanghai Hospital in China will be delayed, as a result of halting of construction during the lockdown,” it said.

Shares of IHH closed unchanged at RM5.41 today, after trading lower for much of the day, valuing the group at RM47.48 billion.

Edited by S Kanagaraju