KPJ Healthcare Berhad - Annual Report 2018

52 KPJ HEALTHCARE BERHAD DE AR SHAR E HO L DE RS AND S TAK E HO L DE RS O F KP J , I T I S MY PRI V I LEGE TO PRESENT TO YOU KPJ HEALTHCARE BERHAD’S (KPJ OR THE GROUP ) INAUGURAL INTEGRATED REPORT ( IR) FOR THE F INANCI AL YEAR ENDED 31 DECEMBER 2018 ( FY2018 ) . Having embarked on our integrated thinking journey in 2016, this year we advanced it further with the goal of providing transparent and accountable reporting, as well as demonstrating how the Group has created and shared value for our shareholders and stakeholders. To prepare us for this effort, the KPJ team conducted workshops during the year, and worked together as a team to produce a concise and focused report with a comprehensive narrative in line with global best practices as espoused by the Integrated <IR> Reporting Framework and Guidelines. Through our IR 2018, we aim to share with you how we have achieved our strategic objectives within our patient centric healthcare business for FY2018, and our forward moving strategies to capture greater long-term value. CHAIRMAN’S STATEMENT KEY HIGHLIGHTS FOR 2018 Since KPJ’s inception in 1981, our focused strategies have sustained our growth in an increasingly competitive and complex healthcare landscape within our footprint in the Asia Pacific region. In our home market of Malaysia, the national economy recorded only moderate Gross Domestic Product (GDP) growth of 4.7%, which has impacted corporate employers’ confidence regarding future economic prospects, and thus many are seen to be mitigating it by downsizing employees healthcare insurance coverage. Whilst the healthcare sector was also shaped by shifts in the regulatory environment, the signal given by the Malaysian Government continues to be reassuring as unveiled in Budget 2019, reflecting national commitment towards raising public healthcare spend to between 6% and 7% of GDP, from 4.4% previously, in line with healthcare spends in developed nations. Notwithstanding challenges faced by the industry, KPJ’s resilient business fundamentals enabled us to record another solid performance in FY2018. The Group recorded our highest revenue to date, which grew by 4% to RM3.3 billion from RM3.2 billion the previous year. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased correspondingly by 18% to RM503.1 million from RM428.0 million in 2017, on the back of IN OUR HOME MARKET OF MALAYSIA, THE NATIONAL ECONOMY RECORDED ONLY MODERATE GROSS DOMESTIC PRODUCT (GDP) GROWTH OF 4.7% DATO’ KAMARUZZAMAN ABU KASS IM CHAIRMAN