IHH Healthcare Berhad (IHH) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of RM6.1 billion (up 30% YoY), with double-digit growth in revenue, EBITDA, and PATMI ex EI, driven by strong demand, higher revenue intensity, and complex treatments.

• Interim dividend of 4.5 sen per share declared, MYR 0.01 higher than last year, payable 30 October 2024.

• Maintained robust balance sheet with RM1.9 billion net cash from operations and RM1.5 billion cash balance; strong operational cash flow supports expansion.

• Group-wide hospital occupancy at 70%, reflecting robust demand and successful execution of growth strategy.

• Continued focus on clinical excellence, expansion, and value-based healthcare across all markets.

Financial highlights

• Q2 2024 revenue (incl. MFRS 129): RM6.1b, up 30%; EBITDA: RM1.4b, up 34%; PATMI (ex-EI): RM437m, up 39%; PATMI: RM623m, up 107%.

• EBITDA margin at 23% (within 22%-24% guidance); PATMI ex EI margin at 9%, up 100 bps YoY.

• Strong free cash flow of RM807m and low net debt position as of June 2024.

• One-off item from IMU sale in prior year impacted YTD PATMI comparison.

• Basic EPS for Q2 2024 was 7.07 sen (up 106%); adjusted EPS was 4.96 sen (up 39%).

Outlook and guidance

• Confident in sustaining growth momentum and profitability for the remainder of 2024, supported by clinical excellence, brownfield expansion, and favorable secular trends.

• Plans to add nearly 4,000 beds (+33% capacity) by 2028 across all markets.

• Focus on market leadership, profitability, healthy ROE, prudent capital management, and mitigating inflationary and interest rate pressures.

• Dividend payout policy set at a minimum of 30%, with current interim payout at 40%.

• Aims to manage cost pressures from inflation, energy, and staff costs through operational synergies and digitisation.