(From left) IHH Healthcare Bhd group chief financial officer Dilip Kadambi, group chief financial officer Dr Prem Kumar Nair, and group chief corporate officer Ashok Pandit at a press conference after the group's annual general meeting on Tuesday. (Photo by Shahrill Basri/The Edge)

KUALA LUMPUR (May 28): IHH Healthcare Bhd (KL:IHH) said on Tuesday that it is still in the midst of looking for potential mergers and acquisitions (M&As) in Indonesia and Vietnam, with a focus on deals that are earnings accretive and offer significant synergies.

According to group chief executive officer Dr Prem Kumar Nair, the group has not made any specific decisions yet, as it would need to evaluate market attractiveness, availability of a sufficient and skilled workforce, and proximity to its current markets for any deals.

"Both countries are performing well economically. In Indonesia, the long-standing issue has been the availability of doctors, but now more foreign doctors are coming in. Indonesia will be the favourable market for private hospitals in the future,” the CEO said during a press conference, following IHH’s annual general meeting.

In addition to expanding in Indonesia and Vietnam, IHH is also exploring M&As in Malaysia, its core market, according to group chief corporate officer Ashok Pandit, adding that it is consistently evaluating opportunities that can deliver sustainable profits.

In December last year, Prem reportedly said IHH is eyeing acquisitions in new markets like Indonesia and Vietnam, in a bid to seize growth opportunities in these economies.

IHH, an integrated healthcare provider, has a capacity of over 12,000 beds, and runs 80 hospitals in 10 countries across Asia and Europe.

Going forward, Prem said on Tuesday that the group plans to add close to 4,000 new beds over the next four years across Europe, Malaysia, Türkiye, India, and Hong Kong.

IHH also anticipates continued revenue growth in the upcoming quarters, and aims to maintain its double-digit return on equity (ROE). The group plans to implement prudent capital management strategies to mitigate the impact of inflationary and interest rate pressures that are driving healthcare cost higher.

"Healthcare cost will continue to rise, but we are focusing on procurement. We negotiate with major equipment manufacturers to reduce costs as much as possible. We also strive for greater efficiency by reducing manpower in non-clinical areas through our workforce transformation programme," Prem added.

IHH is slated to release its financial results for the first quarter ended March 31, 2024 (1QFY2024) on Wednesday.

Full-year net profit jumped 90.64% year-on-year to RM2.95 billion for FY2023, a record high since the group's listing in 2012, boosted by one-off gains from the sale of the International Medical University (IMU), higher patient volumes, and an improved case mix.

Revenue for FY2023 rose 16.38% to RM20.93 billion, from RM17.99 billion a year earlier. The group's ROE, meanwhile, stood at 10.7% for FY2023, up from 6.5% previously.