Azernews.Az

By Bloomberg

IHH Healthcare Bhd., Asia’s biggest hospital operator, expects its Turkish unit to post currency losses following a slump in the lira.

The company’s Acibadem Saglik Yatirimlari Holding AS unit will recognize exchange losses in its profit and loss account when it converts dollar and euro loans into lira, Tan See Haw, IHH chief financial officer, said in an interview Thursday.

Acibadem, with a network of 17 hospitals, accounts for about a third of IHH’s earnings. The lira has tumbled 14 percent against the dollar this year, making it the second-worst performer among emerging-market currencies.

“Foreign currency gains and losses are accounting in nature and are unrealized,” Tan said in e-mailed comments, without giving details. A spokesman declined to comment on the possible impact on IHH’s earnings.

The lira slumped to a record low Monday as Turkey’s ruling party lost its parliamentary majority for the first time since 2002, raising concern about the trajectory of policy making for the $800 billion economy.

IHH, with a market value of $13 billion and controlled by Malaysia’s state-investment company Khazanah Nasional Bhd., said it doesn’t see any cash-flow implications from the losses and does not hedge against such accounting translations. Turkey and Singapore are IHH’s main overseas markets.

Hard Currency

Acibadem plans to conserve hard currency received as payments from medical tourism customers to meet its dollar and euro interest and principal payments, Tan said.

IHH expects the strengthening of the Singapore dollar against the ringgit to boost the group’s net assets and results upon consolidation of its Singapore operations, while the weaker lira will have an opposite effect, he said.

“All companies who invest in foreign assets will have an additional layer of risk,” Ang Kok Heng, the chief investment officer of Phillip Capital Management Sdn., which manages $428 million, said by phone in Kuala Lumpur. “This comes from the translational foreign gains and losses, and unfortunately the lira is slumping now for them.”

The Singapore dollar has risen about 5 percent versus the ringgit this year. IHH has gained 22 percent this year, the best performer on the FTSE Bursa Malaysia KLCI Index. The stock trades at 46 times 12-month projected earnings, compared with 15.5 times for the benchmark gauge.