5 Surprising Takeaways from IHH Healthcare’s Latest Earnings Report

Look closely at IHH Healthcare’s Q3 2025 earnings, and you’ll see a fascinating example. While the headline profit grew a healthy 15%, the profit from its core operations actually fell by 13%. This single contradiction is the key to unlocking a much larger story: one of a global healthcare giant executing a deliberate, group-wide transformation in the face of significant economic headwinds.

Here are five key takeaways from the report that reveal how IHH is proactively reshaping its business, moving from a traditional hospital model toward a more agile, capital-efficient future.

Takeaway 1: Growth That Defies Gravity

In an environment of persistent “payor pressures and cost inflation,” delivering any growth is an achievement. Delivering double-digit growth is a clear signal of strategic execution. IHH posted a 16% year-on-year increase in both revenue (to RM6.6 billion) and EBITDA (to RM1.5 billion).

This performance is not accidental; it is the direct result of specific strategic initiatives designed to counteract macroeconomic challenges. As the CEO’s commentary reveals, this growth is being driven by concrete actions: a successful pivot to a daycare-focused model in Malaysia and the realization of synergies from a “closer operational partnership” between Fortis and Gleneagles in India. These are not just defensive moves; they are proactive steps to build a more resilient operational base.

“We reported strong financial performance even as we continue on our multi-year transformation to anticipate changes and capture longer term opportunities in the industry. Despite payor pressures and cost inflation, Malaysia grew strongly as it pivots towards a daycare focus and as medical tourism share rises. In India, Fortis and Gleneagles are realising synergies through their closer operational partnership, while Singapore saw its flagship Mount Elizabeth Orchard fully re-open during the quarter.” – Dr Prem Kumar Nair, Group Chief Executive Officer, IHH Healthcare

Takeaway 2: The Bizarre Economics of Hyperinflation

One of the most unusual items in the report is a RM245 million “Net monetary gain arising from hyperinflationary economy,” stemming from the company’s operations in Turkiye. This is a direct consequence of applying the MFRS 129 accounting standard, a requirement for operating in hyperinflationary environments. In simple terms, this rule requires the company to restate the value of its physical assets (like hospitals) in Turkiye to account for inflation, which creates a non-cash “monetary gain” on its books.

While technically an accounting entry, it highlights the profound complexities of running a global business. More importantly, this single line item is the primary reason for the major discrepancy between IHH’s headline profit and its underlying operational performance.

Takeaway 3: The Widening Gap Between Headline and Operational Profit

For any analyst, the most critical insight from this report is the divergence between two key profit metrics for Q3 2025:

• PATMI (Profit attributable to owners of the Company): The headline profit figure, which increased by a strong 15% year-on-year to RM616 million.
• PATMI excluding exceptional items (PATMI ex EI): A truer measure of underlying operational performance, which actually decreased by 13% to RM462 million.

This stark difference is almost entirely due to exceptional items, dominated by the RM245 million non-cash gain from hyperinflation accounting in Turkiye. This reveals that without the accounting gain from Turkiye’s volatile economy, IHH’s core profitability would have shown a significant decline, a critical insight completely obscured by the headline number. It underscores that the company’s operational strength lies not in its reported profit but in its strategic response to the very headwinds that impacted that profit.

Takeaway 4: The Future Is Less About Beds, More About Daycare

The report provides clear evidence of a successful strategic pivot in Malaysia, which is a key reason for that market’s strong performance. IHH is actively transitioning to a “more capital-efficient daycare-focused model” specifically to “[contain] payor pressure, cost inflation.”

This is not merely a “forward-thinking shift”; it is a direct and effective countermeasure to the systemic challenges introduced in Takeaway 1. By moving toward a less capital-intensive model that relies less on overnight stays, IHH is building a more efficient cost structure better suited to the current economic reality. This strategic bet is clearly paying off, providing a blueprint for success across the group.

Takeaway 5: Singapore’s Slowdown Shows No Market Is Immune

While Malaysia and India power ahead, the performance in IHH’s stronghold of Singapore offers a more nuanced picture. Singapore’s EBITDA was “nearly flat” due to the familiar headwinds of “payor pressure, cost inflation and phased opening of Mount Elizabeth Orchard during the quarter.” This serves as a potent reminder that even mature, premium markets are not immune to industry-wide pressures.

However, the most important detail lies in the company’s outlook for Singapore. Performance is expected to improve not only as the newly refurbished Mount Elizabeth Orchard ramps up, but crucially, as “the pivot to extend ambulatory care services bears fruit.” This reveals that the daycare strategy in Malaysia is not an isolated tactic but part of a coherent, group-wide strategic theme. By shifting towards less capital-intensive care models in both its high-growth and established markets, IHH is demonstrating a unified response to a global challenge.

Conclusion:

Taken together, these takeaways paint a cohesive picture of a company in the midst of a deliberate transformation. IHH Healthcare is not passively weathering industry storms but actively re-engineering its business model—from integrating operations in India to shifting its fundamental model of care in Malaysia and Singapore—to navigate a complex global landscape. The disconnect between headline and operational profit is not a sign of weakness, but rather a reflection of a business making tough, strategic choices to build a more resilient and efficient future.

As the healthcare landscape continues its rapid evolution, which of these strategic shifts—from capital-light care models to deep operational integration—will ultimately define the next generation of industry leaders?

WATCH THE EXPLAINER VIDEO BELOW:

LISTEN TO THE PODCAST BELOW:

Related stories: Regulatory Chaos Continues At Cordlife Q3 2025