IHH Healthcare Berhad
l
Annual Report 2014
032
ManagingDirector’s
ReviewofOperations
Dr Tan See Leng
Managing Director and Chief Executive Officer
Dea Sha eholde s,
It has been an excellent yea fo IHH Healthca e Bhd (“the G oup” o “IHH”) as we saw
p onounced and steady g owth f om ou ope ations ac oss the spect um. Togethe , they have
cont ibuted to ou vigo ous f nancial pe fo mance towa ds the c eation of a sustainable
base fo futu e g owth.
One of ou key achievements was seeing ou two new hospitals take signif cant steps
towa ds becoming EBITDA positive despite having only opened thei doo s in 2014.
In pa ticula , the Acibadem Atakent Hospital, which opened its doo s to the public in
Janua y 2014, tu ned EBITDA positive in the fou th qua te of 2014. The evenue
achievements of these hospitals a e eassu ing endo sements of ou business plan and
g owth st ategy, which flf lls us with g eat optimism fo the futu e.
We have also continued with our efforts to integrate
our various business units to create long-term value
for our shareholders, and to ensure that we, as a
business, are placed on a more sustainable footing.
I am pleased to report that IHH, as a Group, has
accomplished much in 2014 to form the foundation
for our future growth and acquisitions.
At the same time, our healthy financial status
has placed us in a good position to honour our
dividend commitment for FY2014, with the Board
recommending a first and final single-tier cash
dividend of 3 sen, which represents an increase of 1
sen from the previous corresponding period.
Substantial Growth across All Units
The Group demonstrated substantial growth across
all its business units with EBITDA growing by 17%
to RM1.9 billion from RM1.7 billion a year ago. For
the full year ended 31 December 2014, IHH again
demonstrated robust growth across all key metrics
as headline revenue grew 9% YoY to RM7.3 billion
fromRM6.8 billion and PATMI (excluding exceptional
items) by 29% to RM785.0 million.
The Group’s underlying operational performance,
which strips out the contributions from PLife REIT,
was robust with an EBITDA increase of 11% to
RM1.6 billion, and a PATMI (excluding exceptional
items) of RM704.1 million. We continued to
improve our balance sheet by reducing net gearing
to 0.08 times as at the end of FY2014 from 0.12
times a year ago.
Our resilient revenue and EBITDA numbers were
driven by greater contributions from our existing
operations, and continuous ramp-up of our new
hospitals. Of particular note is the performance of
Mount Elizabeth Novena Hospital in Singapore,
which saw revenue and EBITDA increase by 78%
and over fourfold respectively.
Meanwhile, our new hospital start-ups are trending
in the right direction with Acibadem Atakent Hospital
in Turkey achieving positive quarter to date EBITDA
of RM8.0 million in Q4 2014, within one year from its
opening. Our newly opened Pantai Hospital Manjung
in Perak, Malaysia has seen steady progress in its
patients intake, which has minimised its start-up
EBITDA loss to just under RM5.0 million in FY2014.
The contributions of our various units have thus
created ample space in our balance sheet for
additional leverage and to build up our sturdy cash
position—RM2.5 billion as at the end of FY2014.
This is further supported by our dynamic operating
cash flows which give us significant agility to pursue
our growth strategy going forward.
