In the third quarter of 2024, IHH Healthcare Bhd witnessed remarkable growth across various markets. The revenue showed a significant increase of 10% compared to the same period in 2023. This growth was driven by multiple factors such as higher patient volumes and enhanced revenue intensity. EBITDA also witnessed positive growth, with a 7% increase compared to Q3 2023. Excluding one-off items, the growth was even more substantial at 12%. PATMI saw a 9% increase when one-off items were excluded. The EBITDA margin stood at a healthy 23% for Q3 2024. The company's cash flow performance was strong, with a healthy cash balance at the end of September 2024.

Regional Revenue Growth Highlights

In Malaysia, revenue grew by 11%, mainly due to more inpatient admissions and higher revenue intensity. In Singapore, the revenue increased by 5%, while the EBITDA margins remained stable at 29%. In Turkey and Europe, the revenue grew by 17%, accompanied by a 12% EBITDA growth. In India, the revenue grew by 9%, and EBITDA grew by 32% when one-off items were excluded. Hong Kong also saw a 13% revenue growth, with an EBITDA growth of 63% and margins at 15%.

Malaysia's Performance

Malaysia's revenue growth was impressive, reaching 11%. However, margins fell by 100 basis points due to higher staff costs. Despite this, the company's overall performance in Malaysia remains strong, with a focus on maintaining its leadership position and supporting the country's medical tourism aspirations.

Singapore's Challenges

In Singapore, operations faced margin pressure due to ongoing renovations at Mount Elizabeth Orchard. This led to a reduction in the number of operational beds. However, the company is working on stabilizing these margins and is expected to see improvements by the end of 2025.

India's Growth and Challenges

India's EBITDA and EBITDA margins showed a decline of 3% year-on-year due to a one-off reversal of expenses in the previous year. But the company has implemented several initiatives such as procurement and IT cost synergies to ramp up volume and intensity at facilities. It is expected to continue its growth trajectory in the coming years.

Hong Kong's Success

Hong Kong witnessed a 13% revenue growth with an EBITDA growth of 63% and margins at 15%. This indicates the company's success in this market and its ability to drive growth and improve margins.

Interim Dividend and Financial Highlights

The company paid an interim dividend of MYR0.045 per share in October 2024. This reflects the company's strong financial position and its commitment to rewarding shareholders. The release date of the earnings call is November 28, 2024. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Acquisitions and Initiatives

The company completed the acquisition of Island Hospital, enhancing its leadership position in Malaysia. It also implemented the CDC's antimicrobial stewardship guidelines across its 80-plus hospitals, making it the largest international private hospital network to do so. These initiatives are expected to have a positive impact on the company's future growth.

Fundraising and Investor Demand

IHH Healthcare successfully raised an unrated sukuk program for RMB4 billion, which was over four times oversubscribed. This indicates strong investor demand and confidence in the company's growth prospects.

Managing Challenges

The company faces ongoing challenges with third-party payers, particularly in Malaysia, where medical inflation has been a concern. It is addressing these issues through engagement and potential premium increases. The introduction of co-payment is expected to stabilize the market. Foreign currency translation also impacts the reported financial performance, with the ringgit's depreciation affecting results. However, the company remains financially stable despite these translation effects.

Outlook for 2025

Overall, EBITDA growth is anticipated in 2025 despite the ongoing challenges. In Singapore, renovations are expected to stabilize by the end of the year, and margins are expected to remain stable at 25% due to cost initiatives. In India, the company aims to maintain occupancy in the high 60s to early 70s and will expand through brownfield projects or tactical acquisitions. While some margin volatility may occur, the strategy is to ramp up in bite-sized phases to minimize impact.