KUALA LUMPUR (Nov 28): IHH Healthcare Bhd (KL:IHH) said its third quarter core net profit, excluding exceptional items that included adjustments made due to an accounting rule application, jumped 43% from the previous year on higher patient volumes and as its hospitals take on more complex cases.
The group made a core net profit or profit after tax and minority interest of RM528 million versus RM369 million previously, its bourse filing wrote.
Net profit for the quarter ended Sept 30, 2024 (3QFY2024), however, was little changed at RM534 million, compared with RM532 million in 3QFY2023. Revenue dipped 3% to RM5.6 billion, while earnings before interest, taxes, depreciation, and amortisation (Ebitda) dropped 9%.
This was because the company, which operates in Türkiye, needed to adjust its financial statements to account for the decreasing purchasing power of the Turkish lira due to the high inflation there by applying a specific accounting standard (MFRS 129). This resulted in IHH’s net profit in the corresponding quarter in 2023 being inflated by RM224 million as there was a net increase in purchasing power from the net monetary position of the group’s operations in Türkiye.
For the nine months ended September (9MFY2024), IHH's net profit slipped 13.4% to RM1.93 billion from RM2.22 billion in 9MFY2023, though revenue rose 13.1% to RM17.69 billion from RM15.64 billion, while Ebitda grew 12%.
Excluding the effects of MFRS 129, the group’s core net profit for 9MFY2024 increased 35% to RM1.37 billion, while revenue and Ebitda grew 10% and 7% respectively.
IHH group chief executive officer Dr Prem Kumar Nair said the group saw higher inpatient volumes as well as revenue intensity across all key markets from taking on more complex cases in 3Q and 9MFY2024.
"We also strengthened our leadership position in key markets by acquiring Island Hospital in Penang and opening Fortis Hospital, Manesar in the National Capital Region, India," he said in a separate news release.
"This adds a combined 1,000 beds and allows us to extend our exceptional care to significantly more patients. As we continue to execute on our strategic priorities and placing patients at the centre of all we do, we remain confident of our growth trajectory,” Prem added.
Looking forward, the group expects more than RM200 million in synergies over the next five years from the acquisition of Island Hospital when it is integrated into the group.
In addition, the acquisition of 11 nursing home properties in France by its unit Parkway Life Real Estate Investment Trust (Parkway Life REIT), which is expected to be completed in the fourth quarter of 2024, would expand the IHH’s footprint into Europe.
"The group is mindful that its net finance cost would increase following these acquisitions and would actively manage its cash flows and interest costs," IHH said.
IHH shares closed two sen or 0.28% lower at RM7.23 on Thursday, giving the group a market capitalisation of RM61.85 billion. Year to date, however, the counter has gained more than 20%.