IHH Healthcare, a leading healthcare provider in Asia, has reported a decline in its net income for the fourth quarter (Q4) of 2022. However, the group remains optimistic about its strong balance sheet and revenue growth.
Impairment losses and goodwill affect net income
Despite growth in earnings, IHH Healthcare’s net income fell almost 60% YoY to $57.3m (RM191.3m) in Q4 2022. The decline was primarily attributed to impairment losses associated with its China assets and goodwill.
The group’s China assets were affected by the ongoing regulatory changes in the country’s healthcare sector, while the goodwill impairment was due to the challenging operating environment.
Revenue growth and strong balance sheet
To mitigate the decline in net income, IHH Healthcare reported a strong balance sheet with growth in revenue. The group’s earnings increased $1.4b (RM4.9b) YoY in Q4 2022, indicating a positive trend in its business performance.
The revenue growth was driven by the strong demand for healthcare services in the region, particularly in its home market of Malaysia. IHH Healthcare’s hospitals and clinics saw increased patient volumes and higher revenue per patient.
EBITDA decline due to operating costs
Despite the revenue growth, higher operating costs led to a 4% YoY decline in IHH Healthcare’s EBITDA to $329m (RM1.1b) in Q4 2022. The rise in costs was primarily due to the group’s ongoing investments in technology and innovation, as well as increased staffing and supply chain expenses.
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IHH Healthcare’s Q4 2022 financial statement reveals a mixed performance. While the group saw a decline in net income due to impairment losses, its revenue growth and strong balance sheet signal a positive outlook for its future. The healthcare provider will need to continue to manage its operating costs to maintain profitability in the coming quarters.
