KUALA LUMPUR (Feb 29): IHH Healthcare Bhd’s net profit more than tripled year-on-year in its fourth quarter, driven by higher patient volumes and improved case mix, coupled with the absence of over RM300 million of impairment loss on its China assets and goodwill amid Covid-19 restrictions that it booked in 4QFY2022.

Net profit rose to RM727.45 million or 8.26 sen per share for the three months ended Dec 31, 2023 (4QFY2023), from RM191.27 million or 2.17 sen per share a year ago, the hospitals operator told Bursa Malaysia on Thursday. Revenue for 4QFY2023 grew 9% to RM5.29 billion from RM4.86 billion a year ago.

The group declared a final dividend of 5.5 sen, with an ex-date on March 26 this year. It also revised its dividend policy to raise the payout ratio to not less than 30% of its profit after tax and minority interest, excluding exceptional items, from 20%.

For the full FY2023, IHH’s net profit rose 91% to RM2.95 billion from RM1.55 billion in FY2022, while revenue grew 16% to RM20.93 billion from RM17.99 billion.

To meet growing healthcare needs and demand both locally and from the region, IHH said its organic growth trajectory is set to be enhanced by a significant increase in bed capacity of more than 30%, or close to 4,000 beds, over the next five years.

The group said this increase would see the addition of new beds across Malaysia, India, Turkiye and Europe, alongside strategic exploration for further growth opportunities across Asia and Europe.

The capacity expansion will also encompass facelifts and renovations to existing facilities, building of extensions, new constructions and relocating some of its complementary ancillary services to alternative sites near the hospitals to avail more space for inpatient admissions.

“Besides capacity expansion, the group is growing its portfolio across the healthcare continuum, from primary care and ambulatory to tertiary hospital services, to provide comprehensive patient care,” it said.

“The broadening of services is complemented by investment in new growth areas, including laboratory and diagnostic business, digital health services and innovative technologies, aimed at enhancing patient care and operational efficiency,” it added.

Despite the strong underlying demand for quality healthcare services, IHH said it is cognisant of the cost pressures arising from sustained inflation, and will continue to maintain a tight rein on costs. It is also transforming some of its workflows and processes to streamline and optimise operations for greater efficiency.

“Meanwhile, the group continually reviews and strategically re-calibrates its asset portfolio. It will also take steps to turn around the performance of underperforming assets to enable these assets to reach its full potential,” it said.

“Whilst the group is mindful of global economic and geo-political headwinds, it is confident of its long-term growth trajectory that is underpinned by its strong fundamentals, driven by its robust expansion initiatives and fueled by healthcare megatrends,” it added.

Shares of IHH closed five sen or 0.8% lower at RM6.15 on Thursday, giving it a market capitalisation of RM54.16 billion.