CORDLIFE Group’s net profit for the second half ended Dec 31, 2023, declined 50.3 per cent to S$1.5 million from S$3 million in the year prior.
The private cord blood bank’s earnings per share (EPS) for the second half stood at S$0.0058, down from the previous year’s H2 EPS of S$0.0117.
Revenue fell 4.5 per cent year on year to S$27.6 million, mainly due to lower banking revenue contributions amid a decrease in new samples processed and stored in Singapore, India and Indonesia.
Cordline’s top line decline comes amid a six-month suspension imposed by the Ministry of Health (MOH) from Dec 15, 2023.
Under the MOH directive, Cordlife may not collect, test, process or store any new cord blood and human tissue – nor provide any new types of tests – to clients in Singapore.
The suspension came after MOH found that seven of Cordlife’s 22 cord blood storage tanks had been exposed to temperatures above the acceptable limits of minus 150 deg C, and that these “temperature excursions” had happened at different times, some dating back to November 2020.
Investigations remain ongoing.
With the fall in new samples processed and stored, gross profit slid 6.5 per cent to S$18.3 million in H2, with gross profit margin declining 1.4 percentage points to 66.4 per cent.
On Thursday (Feb 29), Cordlife said this was mainly due to inflationary pressures affecting its cost of service delivery.
It added that its Singapore business continued to incur fixed running costs despite the suspension, which further eroded its gross profit and margin.
For the full year, Cordlife’s net profit declined 24 per cent to S$3.7 million from S$4.9 million in H2 FY2022. The group had earlier guided for a 25 to 30 per cent slide in its net profit for the financial year.
EPS was down at S$0.0145, compared with S$0.0191 in the same period the year before.
Like in FY2022, no dividend was recommended for the financial year.
Its management also cited uncertainty on when its trading suspension would be lifted, or of the outcome of ongoing investigations into the group.
Cordlife’s business operations currently span Singapore, Hong Kong, India, Malaysia, Indonesia and the Philippines.
On the same day as its FY2023 results announcement, the group announced it set up a subsidiary in Vietnam through its wholly owned subsidiary, CS Cell Technologies.
The new unit, named CL Biotech, will mainly provide management consulting services as well as medical and pharmaceutical research and development services.
Responding separately to a Feb 27 op-ed published by The Business Times, Cordlife reaffirmed its confidence in the suitability of its board’s appointment of 34-year-old Yiu Pang Fai as its new group chief executive.
Addressing concerns previously highlighted by BT that Yiu had no background in the healthcare industry, Cordlife said its nominating committee had assessed that it “may be difficult to find a more experienced candidate” than Yiu to assume the role.
This was in view of “ongoing negative publicity” over the company, it added.
Cordlife further reiterated Yiu’s strong background in finance and investment management, adding that he had been “instrumental” in evaluating investment opportunities, managing portfolio assets and driving strategic growth initiatives.
“Mr Yiu had also shown that he had an interest to commit and invest his time to sort out the ongoing challenges faced by the company and to bring back the confidence of shareholders and stakeholders in the company.”
Cordlife shares closed Thursday S$0.01 or 3.3 per cent lower at S$0.29, before the group’s announcements were made.
