August 28, 2012 / 11:17 AM / 7 years ago

UPDATE 1-Malaysia IHH Q2 profit soars on one-off gains, revenue jump

(Adds quotes of executives, details of results)

* Q2 net surges to 403.54 mln ringgit from 76.7 mln ringgit year ago

* Revenue more than tripled to 2.7 bln ringgit

KUALA LUMPUR, Aug 28 (Reuters) - Malaysia’s IHH Healthcare Bhd, the world’s second-biggest listed healthcare provider by market value, posted a more than five-fold jump in second-quarter profit, mainly on consolidation of results from a Turkish hospital and gains from the sale of assets in Singapore.

The arm of Malaysia’s state investor Khazanah Nasional Bhd is one of a small number of healthcare sector plays in the region, where rising incomes and an expanding middle class are boosting demand for better services.

IHH, which raised $2.1 billion in July in the world’s third-biggest IPO so far this year, said net profit was 403.54 million ringgit ($130 million) in the three months ended June 30. Analysts generally don’t provide quarterly profit estimates in Malaysia.

Revenue more than tripled to 2.70 billion ringgit from 815.97 million ringgit a year earlier, according to a stock exchange filing.

Net profit for the six months period ended June 30 rose nearly two-fold to 527.38 million ringgit, exceeding the 515.5 million ringgit full-year profit estimate of analysts tracked by Thomson Reuters I/B/E/S.

“Our successful dual listing in Malaysia and Singapore has significantly strengthened the group’s balance sheet,” IHH chairman Abu Bakar Suleiman said at a media briefing on Tuesday.

“Going forward, we expect earnings to continue to grow as a result of revenue growth and interest cost savings.”

IHH, which counts Japan’s Mitsui & Co as a shareholder along with Khazanah, has expanded rapidly in the past few years and now employs 24,000 people in 30 hospitals as well as medical centres and clinics.

It added Turkish hospital group Acibadem AS, Singapore’s Parkway Holdings and India’s Apollo Hospitals Enterprise Ltd to its local holdings Pantai Hospitals and International Medical University.

EXPANSION EYED

IHH is also eyeing potential growth opportunities in China, India and Hong Kong as well as in other parts of Asia and Central and Eastern Europe, Middle East and North African regions, managing director Lim Cheok Peng said at the briefing.

Its strong branding and the industry’s growth potential in its main markets of Malaysia, Singapore and Turkey as well as planned expansion into other markets have led to most analysts being bullish on the stock.

Of the nine analysts tracking the company, seven have either a ‘strong buy’ or ‘buy’ rating, while two have ‘hold’ calls.

IHH shares in Kuala Lumpur remained unchanged at 3.11 ringgit on Tuesday, ahead of the results. They have remained above the offer price of 2.80 ringgit since listing.

The healthcare sector in Asia has recently seen a lot of interest, especially from private equity firms. In the latest example, global buyout firms have recently bid to buy a fifth of private Indonesian healthcare operator Siloam.

Other key publicly traded medical services stocks in the region include Kuala Lumpur-listed KPJ Healthcare Bhd, Singapore’s Raffles Medical Group Ltd, Bangkok Dusit Medical Services Pcl and India’s Fortis Healthcare Ltd . (Reporting By Yantoultra Ngui and Anuradha Raghu; Editing by Muralikumar Anantharaman)

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