IHH Healthcare, which oversees Singapore-based Parkway Pantai and Gleneagles Hospital, has posted a net loss of RM120.6 million ($39.5 million) for 2Q20 ended June, from the RM185.0 million a year ago.

This brings the total amount of losses for the group to RM440.4 million for 1H20 compared to earnings of RM274.5 million in 1H19.

The quarter’s loss was mainly attributable to the lower operating performance and the realisation of foreign exchange (fx) loss of RM94.8 million from the translation of non-Turkish lira borrowings.

The loss was mitigated by a fair value gain of RM43.3 million on cross currency swaps in relation to the non-Turkish lira borrowings.

As a result, IHH Healthcare saw a loss per share of 1.64 sen for 2Q20 compared to the earnings per share (EPS) of 1.86 sen in 2Q19, representing a 188% y-o-y drop.

“Our results for Q2 2020 naturally reflected the unprecedented challenges from Covid-19. However, our firm focus on executing our refreshed strategy and our agility in the face of changed circumstances have enabled us to remain resilient. We have been able to move quickly to create new revenue streams while keeping a tight rein on costs and maintaining strong cash flow,” says Kelvin Loh, managing director and CEO of IHH Healthcare.

Revenue for 2Q20 fell 30% y-o-y to RM2.57 billion mainly due to the pandemic, where patients postponed non-urgent and non-essential treatments and visits to hospitals and healthcare facilities.

This was partially mitigated by Covid-19-related services from the group.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) dropped 65% y-o-y to RM267.6 million on lower revenue and costs incurred to implement Covid-19 measures at IHH Healthcare’s hospitals and healthcare facilities. The decline was mitigated by government grants and reliefs.

Other operating income rose 139% y-o-y to RM158.5 million mainly due to the grants and reliefs from governments in the countries the group operates in.

In Singapore, revenue and EBITDA fell 24% y-o-y and 35% y-o-y to RM805.9 million and RM224.1 million respectively. The negative impact, which was caused by the pandemic, was most pronounced in the months of April and May, during the circuit breaker measures. This was mitigated by contribution from Covid-19 services such as diagnostic testing, border screening, and treatment of Covid-19 patients.

In Malaysia, revenue fell 23% y-o-y to RM434.3 million with mitigating contribution from on-demand Covid-19 testing services. EBITDA fell 56% y-o-y to RM72.0 million.

In India, revenue dropped 49% y-o-y to RM416.6 million, with contributions from Covid-19-related services. EBITDA plunged 198% y-o-y to -RM73.5 million.

The group’s Central and East European operations saw a 31% y-o-y decline in revenue to RM613.9 million. EBITDA fell 60% y-o-y to RM74.5 million.

IMU Health’s revenue fell slightly at 5% y-o-y to RM63.2 million mainly due to changes in academic year for certain courses, which affected the timing of revenue recognition for these courses. EBITDA declined 8% y-o-y to RM22.8 million, eroded by start-up costs from the IMU Hospital under development and higher costs from implementing COVID-19 precautionary and safety measures.

PLife REIT’s external revenue rose 14% y-o-y to RM39.5 million; EBITDA increased 4% y-o-y to RM73.3 million due to rent contribution from properties acquired in 4Q19.

As at end June, cash and cash equivalents stood at RM2.28 billion.

“While we will have to continue adapting to the fast-evolving situation, our long-term growth trajectory remains intact as we deliver our refreshed strategy. For instance, India’s Fortis, in which we are the largest shareholder, announced its intent to rebrand its hospitals to ‘Parkway’ to leverage IHH’s strong brands,” says Loh.

“In Malaysia, we are pursuing our metro cluster strategy to grow more efficiently and will soon complete the acquisition of Prince Court Medical Centre. Our strategy, underpinned by our commitment to provide unrivalled care and build trust, will enable us to capture emerging opportunities, and come out of this stronger,” he adds.

Shares in IHH Healthcare closed flat at $1.79 on August 27.