IHH Healthcare Berhad (IHH) Q3 2024 earnings summary

Executive summary

• Strong core revenue and EBITDA growth in Q3 2024, driven by higher patient volumes, revenue intensity, and price adjustments across all markets.

• Interim dividend of 4.5 sen per share paid in October 2024.

• Completed acquisition of Island Hospital in Penang and Bedrock Healthcare, expanding capacity and leadership in Malaysia's medical tourism market.

• Manesar hospital in NCR, Delhi, commenced operations, adding significant bed capacity.

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

Financial highlights

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

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

• India business, excluding one-off, grew 32% YoY in Q3; group EBITDA up 12%.

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

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

Outlook and guidance

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

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

• Malaysia margins expected to remain stable at 25% despite payer pressure.

• 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.