Cordlife on target to achieve full-year net profit in FY18

SINGAPORE (Nov 12): Cordlife Group reported earnings of $3.7 million for the 15 months ended Sept, reversing a loss of $2 million for the same period a year earlier.

The private cord blood bank’s current financial year spans 18 months, from July 1 2017 to Dec 31 following a change in its financial year-end from June 30 to Dec 31. Financial years starting after FY18 will begin on Jan 1 and end on Dec 31.

The turnaround in the group’s bottom line for the first 15 months of FY2018 came on the back of higher revenue, which lifted its pre-tax operating profit, as well as an absence of non-operating expenses related to a set of notes issued in 2014 and fully redeemed in Dec 2016.

In the 15 months ended Sept, revenue rose by 11.3% to $85.2 million on higher newborn deliveries in Singapore, India and the Philippines. Total newborn deliveries across all the markets the group operates in increased to 31,900 for the first 12 months of FY18 from 31,800 for the 15 months ended Sept 30 2017.

Lower discounts in India and higher selling prices in the Philippines also contributed to revenue growth.

In addition, the group recognised nine months of revenue from Healthbaby Biotech (Hong Kong) Co, which it acquired in January.

For the quarter ended Sept 30, total revenue rose 1.7% to $16.9 million from the same period last year, aided by contributions from Healthbaby. Earnings came in at $476,000 compared with $649,000 for the same period last year.

Michael Weiss, group CEO and executive director of Cordlife, says, “We have had some success in raising selling prices in a number of markets, such as the Philippines. We have also further streamlined operations to optimise productivity and costs. In Hong Kong, for example, we now have a joint procurement system for our two brands – Cordlife Hong Kong and Healthbaby – and staff from both companies are now housed in one office instead of two. Our entire Hong Kong workforce has also been rightsized following the Healthbaby acquisition.”

Cordlife expects to fund any acquisition or investment using internal resources and debt. As at Sept 30, the group had $42.9 million in cash and cash equivalents, fixed deposits and short-term investments in money market funds. Total debt as a percentage of equity was 4.5%.

Year to date, shares in Cordlife have fallen by almost half to 43 cents.