KUALA LUMPUR (Aug 29): IHH Healthcare Bhd’s net profit dropped 50.7% to RM301.83 million or 3.43 sen per share in the second quarter ended June 30, 2023 (2QFY2023), from RM612.10 million or 6.69 sen per share a year earlier.

The healthcare provider said earnings were impacted by foreign exchange losses following the Turkish lira’s devaluation in June. In 2QFY2022, the group had seen a positive effect of RM294.6 million from exceptional items.

“Net operating income, which reflects the group’s core performance, was steady, declining 1% [to RM315 million] on higher finance costs,'' said IHH in a statement on Tuesday.

In contrast, revenue for the quarter expanded 6.9% to RM4.67 billion from RM4.37 billion as the group saw more patients, accompanied by higher revenue intensity across its markets.

IHH has declared an interim dividend of 3.5 sen per share, to be paid on Oct 27.

For the first half of FY2023, IHH’s net profit grew 53.1% to RM1.69 billion from RM1.10 billion, including one-off gains from the sale of IMU Health Sdn Bhd which was completed in March.

First-half revenue increased 14.99% to RM9.82 billion from RM8.54 billion, mainly on patient volume growth. Return on equity as at end-June stood at 8%.

Moving forward, IHH said it will continue its organic path by expanding bed capacity to close to 3,000 new beds across Malaysia, India, Türkiye and Europe over the next three years.

The group will also drive productivity and operational efficiencies by increasing occupancy rates, improving procurement synergies and investing in innovation; as well as reconfiguring portfolio to improve returns, with a focus on removing underperforming assets.

“Concurrently, the group will seek earnings-accretive opportunities to acquire assets across Asia and Europe, backed by its healthy balance sheet,” it said.

In addition, IHH is expanding its service offerings and developing new growth engines such as its laboratory business while investing in complementary digital health services and innovation.

“Overall, the group expects continued revenue and ROE (return on equity) growth and will maintain a tight rein on costs and leverage operational synergies to mitigate inflationary and interest rates pressures,” IHH added.

Prem Kumar Nair appointed as new CEO

Separately, IHH announced the appointment of Dr Prem Kumar Nair as its new chief executive officer, effective Oct 1.

Prem Kumar is a physician and healthcare executive with over three and a half decades of experience in both public and private healthcare sectors.

He currently oversees the operations and management of IHH's business units in Singapore, which includes the Mount Elizabeth, Mount Elizabeth Novena, Gleneagles and Parkway East hospitals, primary healthcare group Parkway Shenton, as well as ancillary and education entities such as Parkway Radiology, Parkway Rehab, Parkway Cancer Centre and Parkway College.

Meanwhile, Joe Sim has stepped down as IHH’s chief operating officer with immediate effect "to pursue other career opportunities". He had assumed the duties of the group’s managing director and CEO following the resignation of Dr Kelvin Loh in February.

Sim was CEO of IHH's Malaysia Operations Division from June 2017 to December 2019, before being promoted to the role of chief operating officer in January 2020.

Shares of IHH closed up three sen or 0.5% to RM6 on Tuesday, translating into a market capitalisation of RM52.84 billion.