IHH Healthcare Berhad (IHH) Earnings Call Transcript & Summary

Ladies and gentlemen, good evening, and welcome to the Fourth Quarter and Full Year of 2020 Financial Results of IHH Healthcare Berhad Analyst and Media Briefing Conference Call. [Operator Instructions] I must advise you that this conference is being recorded today, the 26th of February 2021. I would now like to hand the call over to your first speaker today, Ms. Penelope Koh from Investor Relations at IHH. Please go ahead, Ms. Koh.

Thank you. Good evening, and here's wishing all of you a happy Chinese New Year [Foreign Language]. Welcome to the IHH Healthcare Fourth Quarter and Full Year 2020 Earnings Call for the period ended 31st December 2020. Thank you for joining us today. I'm Penelope Koh from Investor Relations. With me on the call are Dr. Kelvin Loh, Managing Director and CEO; Mr. Joerg Ayrle, our Group CFO, who has recently joined us starting 1st of February; and Ms. Janet Low from Group Corporate Communications. We also have our colleague, Mr. Evren, who is the Head of Strategic Planning and Investments from Acibadem with us on the call today. For those of you on the webcast, you'll be able to view and download our presentation slides and press release. The materials are also available for download on the IHH website. As for the sequence of the event, Dr. Loh will share with us the key highlights for the fourth quarter and full year of 2020 and the operational performance for the group. Thereafter, Joerg will provide us with the financial performance before Dr. Loh wraps up by discussing the outlook for the group. We'll also have a Q&A session after the presentation. So with that, I'll turn over the call to Dr. Loh. Dr. Loh, please.

Thanks, Penny, and welcome, everybody. Thanks for joining us. In the last 2 quarters, I told you that the group -- that IHH Group has been helping to battle the pandemic. We were in the throes of doing testing. We are taking care of patients in the wards. We even have saving lives in ICU. We continue that fight. Today, as you can see, we are in the next journey of that fight. We are helping to do vaccinations across many of the countries we are in. In fact, I myself have had the vaccination. So our front liners and the group has been working tirelessly. But I'm proud, it's because of the purpose to serve and because of the purpose of being part of and building the world's most trusted health care services networks. On Slide 3, you can see our 65,000 colleagues in the world have been contributing to this journey. And even if they face the fight of a lifetime against COVID-19, they continue to be committed to changing lives and transforming care. On the screen here are just a few examples of how we have enhanced our clinical services across our network over the past year. For example, in India, our team performed a double hand transplant and separately a combined liver and kidney transplant, both of which are incredibly complex surgery but have completely changed the patient's lives. Similarly, at our joint replacement center in Hong Kong, our team has found its way to let patients walk out of the operating theater just 1 hour after knee replacement surgery. Because of this dedication, our team has been recognized by various organizations around the world. In Slide 4, you can see 4 of our hospitals in Malaysia and 2 from Singapore receiving accolades at Global Health Awards 2020. Our team at Acibadem took home the gold for excellence in leadership development in their leadership program for nurses. And 2 of its professors were listed as Stanford's Top Scientists of the World. Turning to Slide 5. I'm very pleased to introduce our new group CFO, Mr. Joerg Ayrle, who officially joined us on 1st February. He's on the call today as well. Joerg brings along a wealth of international experience across all aspects of finance leadership. He has operated in the U.S., Germany, Singapore, China and Thailand. Most recently, he was at the Thai Union Group as their Group Chief Financial Officer and steered the company's financial transformation journey. I found many interesting things about Joerg. One of the things was that during the lockdown, he learned how to bake sourdough bread. So with his wide-ranging interests, expertise and global experience, we look forward to welcome him to IHH. And Joerg, would you like to say a few words, please?

Thanks. Thanks, Kelvin, for a super-warm welcome. Whether the sourdough bread tasted good or not, others have to judge. I did like it, and I will continue practicing baking. I'm super-excited to be here. It's my fourth week. I'm, of course, very thankful and humbled by the very warm welcome by the colleagues, the leadership team, the Board. And look, a couple of first impressions as the new kid on the block. I found amazingly smart, super-intelligent and very, very hard-working people with a very strong sense of purpose to provide health care to people in need, going through this pandemic, going through a very, very difficult period, enormous energy in serving and reaching out to patients. Many programs and initiatives in IHH as spearheaded by Kelvin and his leadership team. And they get towards world-class health care not only in a scientific way or in technological process, but also business model innovation, embracing data science and looking to improve health care operations and services. So a very strong desire, not only to offer highly specialized, complex treatments to premium clients, but also to offer affordable health care. So there's a really strong dedication to patients in need. And of course, look, if you look at the balance sheet, this as a CFO, I'm entering here into a company that has a very, very strong balance sheet, that has enough room for a lot of future value creation, creating opportunities. We have an amazing cash flow of MYR 2.4 billion last year. That -- and that's in a very difficult pandemic year. That's a great achievement. And I think shareholders will be very thankful for that. Performance during COVID has been affected, of course, in Q2 that was really problematic and has step-by-step Q2, Q3 improved on the back of cost management, nimble operators who look out for opportunities to work with governments and the communities they work in. Turkey is welcoming international patients back. India and Hong Kong improved underlying hospital operations. We'll see a little bit later more about that. And of course, Singapore and Malaysia is a stronghold in earnings now further enhanced with the acquisition of Prince Court Medical. Of course, as in any global enterprise and me coming in here with fresh new eyes, there are difficult legacy issues. We have legal situations in India. I think that's very fair to say. And the team is working on what has been inherited, and we're trying to be a good corporate citizen to do the right thing. The Turkish lira situation had weighed on the company in the past. This is resolved, which I think gives really good prospects for the organization and the earnings potential in our European operations. So look, I'm super-excited to be in the health care space. I'm very thankful for the warm welcome. And we'll talk a little bit later about the financial performance.

Thanks, Joerg. Okay. If you turn with me to Slide 7. Just a very quick recap. I'd introduce our refreshed strategy, and that includes extracting synergies across our network, driving efficient growth across our business and developing sustainable platforms. And the reason why we want to do that is to double our return on equity over the 5 years from 2020 to 2024. On Slide 8, I want to give you a bit more color on how we do that. Firstly, on extracting synergies. Due to our geographical footprint, we can extract tremendous synergy, deliver health care better and yet reduce the resources cost of doing so, and therefore, deliver greater value to our patients. For example, in group procurement, we aim to achieve MYR 100 million of cost savings to our group over the next 12 months and therefore enhance operational efficiency. To drive efficient growth or capital efficient growth, as I'd like to call it, I talked extensively last year about our cluster strategy. We will continue to deepen that this year. Leveraging of all the inter-hospital synergies in cluster, drive capital -- capacity utilization are, again, in a capital-efficient way. So an example of this is our acquisition of Prince Court Medical Center, which complements our cluster strategy of having specialized tertiary hospital, along with other hospitals in Kuala Lampur. When I talk about capital efficiency, it also means that we will review our portfolio, and that means it may include divesting of noncore underperforming assets. Finally, in terms of developing sustainable platforms, just to give you examples. We are very focused on digitalizing the care that we can deliver greater convenience and yet -- and the care at lesser cost. We rolled out telemedicine last year to complement our bricks-and-mortar facilities. And as part of this sustainable journey, we will press on towards value-driven outcomes that is to deliver excellent clinical outcomes and using the synergy to operating capability to reduce the results of doing so. Moving to Slide 9. I would like to take you through how we are driving growth across each of our key markets. In Singapore, we will continue to improve revenue intensity by continuing to improve specialization or even super-specialization, as we call it, as we take on more and more complex cases. For example, we are building the proton beam center as we speak. In Malaysia, we are driving up bit occupancy, making use of the cluster efficiencies, cluster strategy, as I have talked about. In Malaysia, also, we intend to extend our reach to the middle-income segment that is still fast growing. In Turkey and Europe, we will also use the cluster strategy to grow. I deliberately mentioned Europe as part of our whole Turkey cluster because that growth in European cluster as well as the European -- as well as the patient -- foreign patents coming into Turkey of which the revenues are in either U.S. or euro currency is providing us an operating hedge in terms of currency. In fact, euro and U.S. currency through our Acibadem group of companies is already contributing to 36% of this segment's revenue. In India, we will continue to drive cost savings and ramp up our productivity. And in China, we will target for Gleneagles Hong Kong to achieve EBITDA breakeven and minimize other start-up costs from our new hospitals in China. So I'll now hand over to Joerg to take you through the results overview and highlights.

Thanks, Kelvin. So let me try this for my first quarter. We've reached in Q4, MYR 3.8 billion in revenue. That is slightly down 2% compared to Q4 2019. We are now on Page 11. We've achieved a MYR 1 billion in EBITDA, that is up 16% year-over-year, MYR 419 million in net income for the quarter and MYR 372 million, excluding extraordinary items, if we take out some of the FX windfalls that we had recorded. So continued recovery. You see this actually quite nicely with a dip in Q2 for the EBITDA development and a very strong recovery. We have now in Q4, best quarter in -- over the last 2 years. You see the income, net income improvement from a loss contribution, of course, affected the certain impairments in Q1, but now really strong recovery and also without extraordinary items, really strong development. Of course, still affected to see affected by COVID-19. We're not out of the woods in terms of top line development. We need to see how the vaccine rollout has an effect on countries opening up with travel. But I think it's too early to now waive a green flag. I think we really need to see still how Q1 goes and how the vaccinations are rolled out. But for Q4, strongest performance for the last 2 years in EBITDA and net earnings. If you look at the EBITDA, it grew 16% on the back of very strong cost measures, some revaluation gains on our REIT, not too much on investment properties. And of course, we have some governments who are helping us during this crisis, of course, on the back of retaining employees and doing the responsible thing with our hospital staff. So we're really grateful for some of this support. If you look at the -- a little bit longer-term trend on Page 12. Profitability shows performance over the past 8 quarters. You see decline in Q1 from Q1 when COVID started and the recovery since then. And as I said, with further vaccination and a gradual opening of international travel, we will see how the development goes, Q1, Q2 and how the recovery continues. If you look year-over-year and for the full year, I don't want to comment too much. Look, 2020 is the year of COVID, and it is affected, and we are down 10% on revenue. We are reaching the year with MYR 13.4 billion. That's minus 10% in 2019, minus 13% on EBITDA and net income without extraordinary items, minus 22%. Actually, it shows that we've been very able to variabilize our cost and our operating base. And I think this is also due to countries like India, who have taken out nearly MYR 30 million annualized run rate overhead costs from their operations, half in Fortis and half in our other operations, very strong support. Our continued resilience among this pandemic is, of course, driven by 3 priorities: Extracting synergies across the company through our 80 hospitals or clinics, our lab networks; driving efficient growth; and developing sustainable platforms. And Kelvin mentioned it. Procurement is one of those items where we want to do more. Our intention is in 2021 to contribute MYR 100 million in cost savings through synergistic procurement across all our entities. If we look at the next page, Page 14. This is the annual comparency on net income, EBITDA and revenue. And what you see is that while the annual numbers dropped, the quarter over -- the year-over-year number for Q4 increases, and that is really an encouraging sign for continuing recovery. Go to the next page, capital efficiency. Of course, heavily affected from Q1 last 12 months. That's clear. But while we have such a performance, we still can fund an acquisition in Malaysia without substantially eroding our debt -- net debt-to-equity basis. If you go to the next page and look a little bit into the contribution of our revenues and our EBITDA, you see the breakdown of revenue and EBITDA hereby key operating division in Q4 and for the whole year, Singapore contributes nearly half of our profitability. I think that has been like that for a long time. And I think it shows that how strong this operation is. But the #2 EBITDA contributor is our European and Turkish business with nearly 30% of our EBITDA contribution. I think we should not forget this, that this really contributes to a very balanced and stable earnings and cash contribution to the group. India showed a very good improvement. The highlight in the quarter 4 is actually coming from Greater China and Hong Kong, with a very strong EBITDA lift and a clear target to reach EBITDA breakeven during this year. Greater China saw in quarter 4, and we usually don't disclose such number in that granularity, but a MYR 50 million EBITDA improvement in Greater China in Q4 is a really strong and positive signal for the group. Quick and maybe hopefully, the last time on Page 17, a comment on an overhang that was rightly identified. Of course, the currency FX exposure used to be an FX exposure through Turkish lira compared to debt that was taken up in euro. The organization has taken swift action, has entered into cross-currency swaps, has pared down substantial amount of debt, and we are now at EUR 180 million in debt from starting at EUR 288 million a year earlier. So very strong deleveraging. And if you look at the natural hedge that the organization has through its cash flows in Continental Europe, we are now basically down to 0 currency exposure. So key takeaways from this section. Very strong cash generation, focus on capital efficiency, with a clear target to double return on equity. Q4 with a very strong EBITDA quarter, best in 2 years. Revenues are still depressed, and we'll need to work on that going forward. So moderate positive outlook. Thank you.

Thank you, Joerg. So moving to the next slide, our operational reviews. We have seen a quarter-on-quarter recovery in inpatient admissions in basically all countries, except for Malaysia. Now in Malaysia, I think it's -- there's some short-term headwinds because -- and the admissions that are really because of the Conditional Movement Control Order, CMCO, started in November. Next slide, more color on Malaysia. You can see that despite what I said about that quarter-on-quarter admission drop, revenues actually improved 7%. Our Malaysian business was able to pivot, provide other services, including COVID-19 related, we also, of course, had additional contribution from Prince Court Medical Centre. As a result of that, EBITDA grew. In fact, revenue intensity growth also helped. And of course, our focus -- continued focus on cost management helped as well. Now year-on-year revenue was flat, and EBITDA improved marginally by 2%. As I mentioned earlier, in 2021, we have used the cluster strategy to drive efficient growth in Malaysia, push up bed occupancy and extend our reach to the still fast-growing middle-income segment in Malaysia. In Slide 21, about Singapore operations. You will see that Singapore has remained resilient with the recovery of revenue. On a quarter-to-quarter basis, revenue increased 6% as local patients, including the elective cases, amongst the local patients continued to improve. EBITDA was up 30% as a result of cost containment measures. And of course, with that revenue growth. And inpatient admissions actually rose 7%. Revenue intensity increased marginally by 0.2%. Of course, as you know, foreign patients still relatively limited in Singapore at this point and foreign patients typically contribute to a higher revenue. Year-on-year for Singapore revenue was down 4%, but EBITDA was high at 7%. So again, for Singapore, looking ahead, we will continue to drive this revenue intensity and continue to improve leverage on Singapore's position as a super specialization hub. On Slide 22, our Turkey, Europe and Central European operations have seen sustained recovery in Q4. On a quarter-to-quarter basis, revenue improved by 5%, EBITDA grew by 25% on the back of inpatient admissions rising 9%. In fact, in Turkey, both local and foreign patients have returned in a big force and revenue intensity is rising by 7.5%. Year-on-year revenue fell slightly, but EBITDA grew 14%. So as I mentioned, we will continue our growth in Turkey and Europe via cluster strategy. Foreign patient volume continues to increase. In Turkey, our European beachhead cluster continues to grow, and therefore, this too, in summation, provides an operating hedge to currency volatility, as I already mentioned. Plus together with what Joerg has said in terms of our foreign debt management, then we're quite -- we are very confident that moving forward, the volatility issue will be much less an effect on our Turkish operations. In India, on Page 23, we see a steady recovery. On a quarter-to-quarter basis, revenue rose 14%, but I'd say that a fair bit of that was due from COVID-19-related services. But also in India, while there's COVID-19-related services, there has been month after month of recovery of non-COVID inpatient admissions. On the back of that rising revenue, EBITDA rose 28%. Year-on-year, revenues have not fully recovered, so a slight drop, 3%. And again, same story as in our other countries of operations. Despite debt, the EBITDA was up 28%. So that was really on the back of strong cost savings initiatives, productivity improvements, and we will continue that journey in India as we move forward. On Slide 24, I'd like to give an update on Gleneagles Hong Kong Hospital. Gleneagles Hong Kong, I'm happy to say, has continued their consistent performance. Revenue increased by 46% year-on-year, and EBITDA losses has narrowed significantly by 81% compared to the same quarter prior year. At that end of Q4, average occupancy was at 63% for 200 bps. One question that has been brought out frequently is when we'll break even. I'm glad to share that we are targeting for Gleneagles Hong Kong to achieve EBITDA breakeven this year, provided Hong Kong does not stay in a protracted lockdown mode. Moving to the next slide. I'm happy to announce that despite an unusual year in 2020, our Board of Directors is pleased to seek approval from our general body for a final dividend of MYR 0.04 per share for the full year of 2020. Now going on to our overall outlook. To summarize what we have discussed on Slide 26. You can see that we have been on a recovery trend since June when we took the brunt of the impact from COVID-19. Our strong Q4 and FY '20 results [indiscernible]. We are optimistic of continued recovery, even if there's some short-term headwinds. Our refreshed strategy anchors our proactive strategic trust and to mitigate the impact from this pandemic. On the top line, our diversified earnings across 10 markets provides us resilience, and we have set a specific strategy for each growth -- for each market to have efficient earnings growth. On the bottom line and on the cash and balance sheet front, we continue to keep a tight cost discipline and remain in a strong financial position. The result of that is that strong earnings growth in Q4 over prior year, even though revenues are still recovering. So looking ahead, we are on track to doubling our return on equity over the 5 years from 2020 to 2,024, and we'll do so via specific plans for each market, as mentioned. With that, thank you, and I hand the floor open to Q&A.

Thank you, Dr. Loh, we'll now take your questions. [Operator Instructions] With that, operator, you may proceed with the Q&A.

[Operator Instructions] First question comes from the line of Nicole Goh of UBS.

I just wanted to find out. My first question is on Malaysia. How much the Prince Court actually contribute to Malaysia's revenue and EBITDA in the fourth quarter?

Okay. So Prince Court, on quarter-to-date, contributed about $60 million in revenue.

That's in ringgit, right?

Yes. It's in ringgit.

MYR 60 million, sorry, yes.

Okay. So that's the revenue. And was the EBITDA contribution significant?

The EBITDA contribution was positive.

Okay. That's not -- is there a number you can share?

We prefer not to share stand-alone hospital figures. Yes.

I think you still have a lot of acquisition-related costs involved here. So I think it's a bit hard to show first quarter EBITDA contribution. But I think going forward, I think this is we can share you a trend. Contribution was well positive.

Okay. Sure. Second question is on your Singapore EBITDA margin. It has gone up quite a fair bit, even on a Q-on-Q basis. So from Q3 to Q4, I think it's like 4.5 percentage points. I noted that you mentioned that it's because your cost cutting measures. Is this kind of margin above 40% something that is sustainable going forward?

So for Singapore, clearly, the EBITDA contribution was strong operationally, but it was also supported by government grants. So in quarter 4, government grants in Singapore was about MYR 25 million.

Okay. And is this government grant, is this something that will continue this year? And if so, for how long?

No, we expect the government grant to tail off -- to finish off in FY '20.

Our next question is from the line of Divya Gangahar of Morgan Stanley.

I had -- the first question that I had was on Acibadem. I wanted to understand with the margins in this quarter hitting close to 28% and the revenue intensity is also high. I just wanted to get some color on the sustainability and outlook for this part of the business that too since we have the expert on the call. So that's my first question. And my second question is just a follow-up on Singapore. I just wanted to get a sense on what was the COVID-19-related service contribution to revenues? And is the JSS scheme for you guys also extended beyond March? Or does that expire? And is that different from the government grants that you just talked about, which expired in 2020?

Maybe I'll just quickly answer the Singapore one. So it's the same grant we're talking about. It's the JSS grant. And that basically, for us, is -- we won't have any of that in FY '21. The COVID-19 services contributed about MYR 58 million to Singapore's EBITDA. For the COVID-19 services, we continue to provide in Singapore and still continue to see a fair bit of that as we go forward.

Okay. And what was the revenue contribution to -- this is the EBITDA contribution you mentioned, right? In terms of revenue from COVID-19?

I think suffice to say, you can sort of see that via the EBITDA contribution. So...

Okay. Sure.

So...

And this is going to sustain because that process continues to grow and...

There's still fair bit of COVID work in Singapore going forward.

Okay. And -- but does this include vaccination? Like what's the revenue model of vaccinations for you?

No. Vaccination is not -- that doesn't really have a revenue model. As you know, in most countries, including Singapore, the vaccine is provided by the government at no cost to the citizens. And we basically just provide the service. So on Turkey, the strong growth in the EBITDA. Evren, if you underline, you want to comment on that?

Sure, sure. I think regarding the margin improvement in the fourth quarter is a combination of certain factors. Number one, obviously, the medical tourism impact for inpatients, they're opening in Turkey by June 1. We have seen an uptick in our medical tourism volume, especially reaching and surpassing pre-COVID levels by September. So that's number one. Number two, elective, obviously, post Q2, the big rebound, that also had an impact as well as during the quarter, with the wave in Turkey, we have seen an increase in our COVID revenues from private patients. That also had good contribution margin to our bottom line. And lastly, the ramp-up our European business. In all of our European jurisdictions, we had very strong results, improved margins particularly in Netherlands, Amsterdam as well as Macedonia and Bulgaria. Thank you.

Sorry, can I just follow-up and ask that what's the COVID-related contribution for this entire segment of Turkey and Europe and CEE?

So with regards to Turkey, it's low teens, I would say, for the quarter as a percentage. And then for Macedonia, it's a little bit higher, around 20%. The COVID exposure in Netherlands, we don't have much because it's a day surgery clinic. So we don't treat COVID patients. So it's a pure operational ramp-up of that facility. Similarly, in Bulgaria, COVID contribution is somewhat limited.

And for you, COVID is a relatively higher-margin revenue stream or a lower margin?

It depends on the type of patient admitted. It's low-revenue intensity, but relatively higher margin compared to complex treatments, but elective wise, when you think about the electives, it's within the same range of margin.

Our next question is from the line of Rachel Tan of DBS.

2 questions from me. I think it's quite good to share that Gleneagles Hong Kong is finding breakeven. Just wanted to get some sense on Chengdu how they are doing? And do you expect the gestation losses to narrow further in FY '21? And any updates on your Shanghai hospital?

So Gleneagles Chengdu, as you know, is in a very much start-up stage, and we, in essence, have opened 30 beds. We will keep the operating costs low. So you will not find much effect of a cash burn or a direct from Gleneagles Chengdu. Parkway Shanghai, it's been delayed. It's likely that the opening could be towards the end of '21 or in '22.

Okay. Got it. And your target of doubling your ROE, I'm just wondering if you could give us a breakdown on how much would that come from your organic growth? And how much would that come -- potentially come from your divestment?

Most of it will be through organic growth.

Next question is from the line of Cezzane See of CIMB.

Just wanted to find out a bit more on the Singapore side for the government grants. Could you just remind us again, in totality, how much that would have been for the year? And then my second question would be, in terms of Malaysia, there has been the talk of putting in about 10% of beds in hospitals to help COVID-19. How should we look at maybe potential margins then moving going into 2021?

Okay. On the Malaysia one first. So yes, we are ready and we stand ready to help the public sector and the government in Malaysia to taking COVID patients to fight the pandemic. I did say that the likelihood of impact to margins is going to be relatively muted. While we have the capacity to take up that by the [indiscernible] and cases are relatively small. And overall, I don't anticipate much of an impact to Malaysian margin. The other 1 on Singapore, in terms of the total support scheme in Malaysia -- sorry, in Singapore, do you have the year-to-date number. It was about MYR 190 million.

Got it. Okay. And if I may, can I -- just one more question. There was top of Turkey. I mean, Acibadem seeing quite good margins because of also medical tourism and also COVID revenues, and this is above even pre-COVID. Would you say that if the COVID situation improves, is this something that could dissipate or -- as other places open up? Or is it something that you see could be a new normal for the Turkey Europe side?

Sorry, can you ask that question again. Do you mean to say that the new normal being what again?

Sorry, from what I understand from -- is that I mean Acibadem side, the margins have been quite good because you've seen quite a fabulous medical tourism, and this is above pre-COVID levels. Would you say then that if there is a sort of normalization to this effect, would that change? Or is this something that we should expect from the Europe side moving forward in terms of margins? Of course, it's done really well.

Overall, because when we look at from the Q3 going to Q4, I think it's fair to say that it's moving towards some normalization and barring major changes, then the margins are likely -- not likely to change that much.

Our next question is from the line of [ Arjuna Chandra Shankar ] of [ ZH Malaysia ].

I have 2 main questions. The first question is in terms of earnings recovery. So do you think that in your 2021 financials that there will be a recovery in earnings? And if so which of your markets would be the main driver for this recovery? And second question is mainly in terms of asset acquisitions or disposals. So are you looking to acquire more hospitals or health care facilities in 2021? Or are you looking to dispose of any as well this financial year?

So I mean we continue to see growth. As I mentioned, we will grow in a capital-efficient way. By way of expansion strategy, of course, we try to fill up beds where we still have bed capacity. Then we look on to expanding even on our existing -- around our existing facilities on land that we might have. And of course, we remain open to acquisitions, particularly bolt-on acquisitions in our respective clusters.

Next question is from the line of Shyam Srinivasan of Goldman Sachs.

Just on Slide '19, you give us IP revenue per IP admission. Just trying to remove the impact of COVID revenues, which you can call it maybe not sustainable. Just want to understand how the underlying -- whatever intensity and pricing dynamics have been excluding COVID in all these markets?

Sorry, can you repeat the question?

So Dr. Kelvin, I'm just asking how is the average revenue trends, excluding COVID revenues. When I look at IP revenue per IP admit, I know the COVID impact is probably starting to come down. But if we can strip it out because some of the numbers are very high, right, 23%, 45%, 30%. So just trying to take out the impact of COVID out of that and just see what the sustainable kind of revenue intensity is?

Okay. I understand your question now. Actually, the other way around, the -- when you say the COVID impact, I was wondering whether you meant it is because of a high number of COVID patients and therefore contributing to that revenue -- growth in revenue intensity. Actually, it's the other way around, which is that during this entire pandemic time, what's really been happening is that the elective workload has been somewhat muted, even though it's been recovering ever since Q2, but not to its fullest extent, right? So what that means is that people tend to postpone the lighter electives or they are less likely to be admitted to hospital when they are not as sick. The result of that is that the cases that come to hospital tend to be sicker, they tend to be the more complex procedures. And because of that, the revenue intensity is high when you compare on a year-on-year basis in essence during COVID period versus pre-COVID period. So as we go towards normalization, meaning to say that as recovery continues to pick up, and the lighter elective and the less severe patients start to come back towards that normal, then we expect to see the revenue intensity decrease as well. So that -- so the picture that you see on this slide '19 is that effect now. But for example, if I have to go back to one of the questions that was raised, say, for Acibadem, our Turkish operations earlier, whether that same level of growth and intensity and therefore, EBITDA margins can be exactly maintained. In that situation, in quarter 4, there was actually a fair bit of add-on revenues from COVID patients as well, right? So because of non-COVID patients being high in numbers, in both domestic and foreign patients. And then we also had a COVID patient, so naturally, we saw high growth in total. As we move forward, the question on whether that kind of high revenue and EBITDA can be sustained, then in the short term, it depends on that -- it depends on the [ crossroads ], right, meaning COVID-19 patients will start to fall off and the non-COVID patients will start to pick up. So maybe transiently that's sort of cancels each other, but eventually, we expect even our operations in Turkey to continue to have strong growth. So does that make sense? So we can interpret it in different ways depending on the different situation.

Yes. Dr. Kelvin, maybe let me simplify. Just a follow-up. So it's not easy for us to say whether in -- we know, for example, in India, the COVID revenue, COVID occupancy is lower than your non-COVID, but you're saying that may not be the case in each of these markets. A qualitative answer is fine.

No, I was responding to a question of the revenue intensity being high in -- versus a high meaning as I said our strong growth when you look at it from year-over-year. And the reason for that in many parts of our operations is because the elective workload hasn't fully recovered. When that hasn't fully recovered, what that means is that the patients in hospitals tend to be the most complex and sickest ones, right? Because the less sick ones won't come in as much yet or it's still recovering. And therefore, when you look versus prior year, revenue intensity is higher. So that story, in general, is true throughout.

Fair enough. Second question is on the India legal scenario. If you could give us an update, I think the Supreme Court, the local Supreme Court has been asking for additional data. But just from your standpoint, what can you give us an update?

So the Supreme Court hearings have proceeded at a good pace. In fact, over the last -- in February, there have been separate hearings, and we will continue to have more hearings in March. We are confident in the Indian judicial system, and we look forward to a right outcome.

Got it. Dr. Kelvin, last data point, when you say ROE is doubling, what is the base number in 2020?

I think you can work it out. By end of 2019, our ROE is probably in the order of magnitude of 2.5%.

So 2.5% going to 5% in the next 5 years.

Yes. You can say that.

Next question is from the line of Amanda Foo of Crédit Suisse.

welcome on board, Joerg. I have 2 questions from my end. First of all, I've noticed that you haven't really shared the foreign patient revenue contribution this quarter for each market, only the exception of Turkey. I understand that at this point, foreign patients are not contributing very much, but I would still appreciate if you could share the numbers with us for this quarter.

Foreign patients in Turkey?

For the other markets that [indiscernible] market.

Okay. So -- no, it's relatively muted in the other markets. In Turkey, it's the highest. It's probably about 16% of revenues within Turkey. In the other markets, it's really relatively muted. So in Singapore, it's probably a -- yes, in the single digit. In Malaysia, low single digits. Same in India as well. India, probably about 5%.

I remember in last quarter, I think Singapore had about 67% of foreign revenue contribution. Can I ask if that number has stayed the same?

For Singapore, yes, roughly about that.

And my second question would be on Turkey operations. We spent a lot of time talking about Turkey. And it does seem that it's close to turning profitable in FY '20, at least based on the segmental breakdown. So can we expect to see an inflection point in 2021, given the growth that we've been talking about in EBITDA in foreign inpatients and not forgetting the deleveraging of your foreign currency risk. And you talked about COVID patients contributing quite a bit in terms of add-on revenue in the fourth quarter. How much the COVID patient contribute in terms of occupancy rate then?

The COVID patients was probably about 11% of revenue. So it's not exactly that big. So -- but in any case, as that tapers off, I'm pretty sure our Turkish operations will continue its growth in both domestic and foreign patient revenues.

So in terms of occupancy rate, would it be similar to the contribution of revenue precaution? Or would that be actually larger because...

No, it has been lower because COVID patients tend to have lower revenue intensity.

Right. So occupancy rate would be higher?

Lower.

Lower. Because they have lower -- sorry, occupancy, that's right. The occupancy rates might be higher. That's right because the revenue that is lower. Evren, do you want to confirm that?

That's true. That's true. I mean, obviously, when you look at COVID revenues, there's an inflation part of it. Then there's also PCR test lab revenue. But speaking of occupancy, because the average length of stay for a COVID inpatient is typically higher than regular elective patients stay in ENT surgery to 3 days, 4 days stay versus a COVID patient may stay maybe 2 weeks. So that impacts relatively a higher occupancy rate. But as Kelvin mentioned, Dr. Kelvin mentioned, lower revenue intensity.

And in terms of bottom line, can we expect Acibadem to be in the black this year than since the majority of your foreign currency debt has reducing -- sorry, being hedged?

I'd say we are optimistic.

Okay. And if I could just squeeze 1 last question. Just on Malaysia, fourth quarter inpatient admission has fallen 6% quarter-on-quarter. I just wanted to check, is this decline the full extent of the MCO 2.0 impact? Or did it actually get subsequently worse this year?

Yes, basically due to the MCO impact.

And did it get -- what -- because I think the MCO only came in towards December, right?

That's true. I think towards...

Later...

Later part of November and then into December. And that's creating a short-term drag. I think what we can do see is that compared to the first MCO in Q2, the impact is certainly lesser.

[Operator Instructions] No question as of the moment. Please continue.

If there are no further questions, we will now then conclude the IHH Healthcare Fourth Quarter and Full Year 2020 Financial Results. We thank -- thank you for joining us today. And if you have any other further questions, please feel free to contact me via e-mail at [email protected]. With that, operator, you may disconnect.

Thank you.

Thank you.

Good evening, and nice weekend.

Thank you. Ladies and gentlemen, that concludes the conference for today. Thank you for participating. You may now all disconnect.