ISTANBUL (Oct 11): IHH Healthcare Bhd’s 90%-owned Acibadem Saglik Yatirimlari Holding AS is ramping up efforts to expand its presence in Europe and to attract more international patients in a bid to maintain profitability amid the severe devaluation of the Turkish lira from hyperinflation.

Acibadem’s founder and chairman Mehmet Ali Aydinlar said although the group had mainly relied on organic growth in the past, management will “pay attention to profitable acquisition [targets]. We cannot acquire loss-making companies and turn it around.”

“We are not going to make small investments; we are going to make mid-to-large scale investments. We have many opportunities, we are evaluating them, trying to know which one is the best,” he told a group of analysts and reporters during a briefing here.

“Unfortunately, in recent years, there has been a devaluation in the Turkish lira. Our investments in Europe are actually our insurance. All these European assets, this is what protected us from the devaluation.

“We have a very successful operation in Amsterdam, Netherlands. Now, Rotterdam is the second largest city after Amsterdam. We are starting construction of a new hospital building in Rotterdam. We are planning to complete it within a year.”

Currently, there are 25 hospitals under Acibadem, 19 of them within Türkiye and the rest in four other European countries: Netherlands, Bulgaria, Serbia and North Macedonia.

Aydinlar observed that 2023 was not a good year for Türkiye operations, pointing to the February earthquake that affected more than 10 provinces in the country. In addition, the recently concluded presidential and parliamentary elections have weighed on Acibadem's business volume.

He expects the country’s economic conditions to improve going forward, especially after the conclusion of local elections in March next year.

For the second quarter ended June 30, 2023 (2QFY2023), IHH’s net profit slumped 50.7% to RM301.83 million from RM612.10 million a year ago as earnings were impacted by foreign exchange losses following the Turkish lira’s devaluation.

However, revenue for the quarter was higher, expanding 6.9% to RM4.67 billion from RM4.37 billion, as the group saw more patients across its markets.

Net profit for the first half (1HFY2023) grew 53.1% to RM1.69 billion from RM1.10 billion in the previous corresponding period, thanks to a one-off gain from the sale of IMU Health Sdn Bhd which was completed in March.

Revenue increased 14.99% to RM9.82 billion for 1HFY2023 from RM8.54 billion previously, mainly on patient volume growth.

Türkiye and Europe collectively were the second largest revenue contributor to IHH for 1HFY2023, bringing in RM2.48 billion, up 21% from RM2.05 billion in the previous corresponding period.

Singapore was the largest revenue driver for the healthcare group, providing RM2.67 billion, up 12% from RM2.38 billion in 1HFY2022.