IHH Healthcare Berhad (IHH) Q3 2024 earnings summary

Executive summary

• Achieved strong core revenue and EBITDA growth in Q3 2024, driven by higher patient volumes, revenue intensity, and strategic acquisitions including Island Hospital and Bedrock Healthcare.

• Maintained a robust balance sheet with net cash from operations at RM3.1 billion and net gearing reduced to 0.24x.

• Paid interim dividend of 4.5 sen per share in October 2024; total dividends YTD at 10 sen per share.

• Expanded market leadership with Island Hospital acquisition, Fortis Hospital Manesar opening, and Bedrock Healthcare acquisition.

• Expanded antimicrobial stewardship program to over 80 hospitals in 10 countries, aligning with CDC and WHO guidelines.

Financial highlights

• Q3 2024 revenue (ex-MFRS 129) rose 10% YoY to RM6.1b; EBITDA up 7% to RM1.4b; PATMI (ex-EI) up 9% to RM563m.

• YTD 2024 revenue (ex-MFRS 129) increased 15% to RM18.1b; EBITDA up 16% to RM4.1b; PATMI (ex-EI) up 21% to RM1.7b.

• YTD 2024 revenue rose 13% to RM17,691m and EBITDA increased 12% to RM4,014m; PATMI (ex-EI) up 35% to RM1,368m.

• Group EBITDA margin at 23%, within guided range of 22%-24%.

• Free cash flow for YTD September 2024 was RM1,483m; net cash from operations at RM3.1b.

Outlook and guidance

• Confident in continued growth trajectory, focusing on profitability, market leadership, and healthy ROE.

• Margin pressure expected in Singapore due to Mount Elizabeth Orchard renovations, with recovery anticipated by end-2025.

• More than RM200m in synergies anticipated from Island Hospital acquisition over five years.

• Group remains cautious of cost pressures from inflation, energy, and staff costs, but aims to manage these through operational synergies and digitisation.

• Net finance costs expected to rise following recent acquisitions; active management of cashflows and interest costs planned.