KUALA LUMPUR, Malaysia--Malaysian hospital operator IHH Healthcare Bhd. (5225.KU) said Wednesday that its net profit for the second quarter rose 29% from the previous year, thanks to gains from its divestment of a stake in India's Apollo Hospitals.
Net profit for the April-June period climbed to 316.6 million ringgit ($73.9 million) from MYR246.1 million a year ago, IHH said in a statement. Excluding the one-off gain, net profit for the quarter fell 54% to MYR86.2 million on higher depreciation, amortization and finance costs following the launch of two new hospitals in Hong Kong and Istanbul, IHH said.
Revenue climbed 12% to MYR2.77 billion from MYR2.47 billion a year earlier due to increased inpatient admissions and new hospitals opened in March, it added.
IHH said Tokuda Group and City Clinic Group in Bulgaria, acquired in June 2016 and since consolidated into Acibadem, also contributed to the revenue increase.
Looking ahead, IHH, the world's second-largest health-care services firm by market value, said it expects to face cost pressures on several fronts. These include wage inflation from increased competition for talent, rising purchasing costs due to a stronger U.S. dollar and higher pre-operating costs and startup costs from new operations, which would partially erode profitability in the initial stages, IHH said.
"To mitigate these effects, IHH will remain prudent in its cost management; improve the mix of higher revenue intensity cases and ramp up new facilities to achieve optimal operating efficiencies," it said.
Shares of the company ended 0.5% lower at MYR6.00 on Wednesday ahead of the results, underperforming the local benchmark stock index's 0.07% drop. The stock has declined 5% so far this year.
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(END) Dow Jones Newswires
August 23, 2017 06:16 ET (10:16 GMT)