IHH Healthcare revises dividend policy upwards; reports 280% Q4 earnings jump

INTEGRATED healthcare provider IHH Healthcare on Thursday (Feb 29) enhanced its dividend policy, while reporting earnings of RM727.5 million (S$205.8 million) for the fourth fiscal quarter ended December 2023, a 280 per cent jump from RM191.3 million in the corresponding quarter a year earlier. 

The dividend policy is revised upwards to no less than 30 per cent of the group’s profit after tax and minority interests, excluding exceptional items, from a ‘no less than 20 per cent’ policy. With this, the company declared a second and final cash dividend of 5.5 sen per share for FY23, to be paid on Apr 26.

On a per-share basis, its latest financial result translated to earnings of 8.26 sen, versus 2.17 sen in the previous year. The company said that the outperformance was driven by higher patient volumes and improved case mix, with its hospitals serving more acute patients.

Q4 revenue rose 9 per cent to RM5.3 billion, as hospital and healthcare revenue rose 13 per cent to RM5.2 billion, while its earnings before interest, taxes, depreciation, and amortisation jumped 10 per cent to RM1.2 billion. 

The growth in hospital and healthcare revenue was attributed to strong recovery from core non-Covid-19 revenues, as both local and foreign patients returned to seek treatment at the group’s hospitals. The group also noted that it had adjusted prices to counter inflation.

The ramp-up of operations at Atasehir Hospital, which opened in September 2022, the continuous ramp-up of operations at GHK Hospital, as well as the acquisitions of Ortopedia on Aug 9, 2022 and Kent on Feb 14, 2023 also contributed to the increase, it added.

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In Singapore, its hospital inpatient admissions was, however, flat at 14,997 in the quarter, while its revenue per inpatient admission increased 8 per cent to RM62,665.

Meanwhile, its Malaysia hospital inpatient admissions rose 8 per cent to 61,638 in the quarter, while its revenue per inpatient admission increased 4 per cent to RM10,151.

For the full year, the group’s revenue rose 16 per cent to RM20.9 billion, while net profit excluding exceptional items fell 7 per cent to RM1.3 billion on higher net finance costs and lower exchange gain.

The group said that the net profit was eroded by higher depreciation and amortisation on re-indexation of assets in Turkey under MFRS 129, deferred tax recognised on the uplifted carrying value of the reindexed assets and translational effects from a weakened Turkish lira against the ringgit during the year.

MFRS 129 refers to the framework for financial reporting in hyperinflationary economies. 

Excluding effects of MFRS 129, the group’s FY23 net profit excluding exceptional items would rise by 17 per cent, it highlighted.

Shares of IHH Healthcare closed S$0.02 or 1.1 per cent higher, at S$1.77 on Thursday, before the results announcement.