IHH Annual Report 2018

Description We pursue growth by increasing capacity at our existing hospitals or through organic growth in our existing or new markets. Backed by our strong financials, we continue to strategically invest in areas with the potential to build scale and bolster the Group’s leadership positions in these markets. Alongside organic growth, acquisitions in new and existing markets are expected to be accretive for IHH Healthcare’s topline. Our acquisition programme is underpinned by the strong cashflow generated from our home markets. Together with our experienced management team, we will execute a multi-pronged strategy to enhance our diversified offering via organic and inorganic growth. ​ Our Progress in 2018 The ramp up of Gleneagles Hong Kong Hospital, which opened in March 2017, remains on track. The hospital has undertaken a high volume of complex cases and has continued to narrow its EBITDA losses since its opening. Doubling its capacity to approximately 400 beds is Acibadem Maslak Hospital in Istanbul, which commenced operation for its increased capacity in October 2018. This multi-disciplinary tertiary hospital offers a range of speciality services, including a Spine Centre and Breast Health Centre. This expansion with the addition of new beds has further enhanced its contribution to the Group revenue. Also in Istanbul, the multi-disciplinary tertiary Acibadem Altunizade Hospital opened in March 2017 with 350 beds. Oncology is one of Acibadem Altunizade’s many speciality focuses, and in 2017, the hospital conducted about 15,000 chemotherapy sessions and 26,000 radiotherapy sessions. Acibadem Altunizade Hospital is the second leading hospital after Acibadem Maslak Hospital within the Acibadem Group. Overall, as the new hospitals ramp up their operations and achieve operating leverage, this has led to an increased top line contribution and EBITDA losses to continue to narrow in 2018. The acquisition of Fortis Healthcare marks a significant milestone in the Group’s expansion path in India. The acquisition of a controlling interest in Fortis Healthcare will significantly increase our reach across India, complementing our existing capabilities in the high-value quaternary care segment. Adding to the successful acquisition in India, the Group acquired a 100% stake in Amanjaya Specialist Centre Sdn Bhd – a 98-bed multi-specialty hospital in Sungai Petani, Kedah in Malaysia on 1 October 2018. By streamlining processes and operations between Amanjaya and the full-capacity Pantai Hospital Sungai Petani, the Group is expected to benefit with more effective growth in the region. ​ Our values and purpose are aligned to the strategic endeavours that drive our competitive advantage in a dynamic marketplace. Through methodical assessments of potential opportunities, we strive to implement transformative initiatives that are designed to strengthen the business for our stakeholders. Supported by our Sustainability Strategy QUALITY HEALTHCARE To prioritise patient experience and encourage feedback to meet satisfaction levels, and to continuously benchmark our quality standards to international standards throughout our operations 1 ORGANIC GROWTH INORGANIC GROWTH Geopolitical risk Foreign exchange risk Link to Principal Risks Geopolitical risk Foreign exchange risk See page 41 on Principal Risk for more information IHH Healthcare Berhad | Annual Report 2018 38 Strategic Report BUSINESS STRATEGY