With a gearing ratio now of 0.26 times, the group CFO of IHH Healthcare Joerg Ayrle is aware that the healthcare giant’s balance sheet can be stretched. Barely half a year into this job, he is already helping to weigh options on how to make better use of the company’s capital. “Now, is it 0.8 times, or 1? I think we’ve not come to a final landing on that. But what is clear is 0.3 is not where we should be in the long term,” says Ayrle in an interview with The Edge Singapore.
One way to please shareholders is to give back excess capital. However, Ayrle believes that the healthcare industry, underpinned by broader trends of demographics and growing affluence, is now in one of its “most dynamic” periods. As such, IHH is leaning towards making more acquisitions, and there are a few options on the menu.
For example, IHH runs a diagnostic business that is seeing growing demand and therefore a market to bulk up in. IHH has selected the Indian subcontinent as one with lots more potential and where it wants to grow “substantially”. Even in mature markets of Europe, there is potential to pick up stable, income-generating businesses too. “We should be able to find assets that we want to invest in, and I think we will see soon that there are areas where we can deploy capital,” he says.
