Cordlife’s 1HFY2014 net profit rises 52.9% to S$12.9 million, due to one-off items
- Revenue surges 31.3% as strong client deliveries from India,
Indonesia and the Philippines offset lower Hong Kong
contributions due to ban on mainland Chinese women’s deliveries
- Board of Directors declares interim dividend of 1.0 cent to reward
shareholders
- Benefiting from economies of scale and scope as a multi-product
healthcare company catering to the mother and child segment
Singapore, 11 February 2014 – Cordlife Group Limited (“Cordlife”, and together with its subsidiaries, the “Group”), a multi-product healthcare company catering to the mother and child segment, reported that its net profit for the first 6 months ended 31 December 2013 (“1HFY2014”) increased 52.9% to S$12.9 million year-on-year (yoy) on the back of healthy revenue growth, strong margins, a S$5.4 million fair value gain on long-term investment and a gain on transfer of investment in associate to long-term investment of S$6.2 million. Revenue grew 31.3% over the same period, up from S$17.9 million for the first 6 months ended 31 December 2012 (“1HFY2013”) to S$23.5 million for 1HFY2014 due to contributions from newly acquired entities and assets.
Excluding non-core and one-off items1, the Group’s core net profit after tax would have been S$3.4 million for 1HFY2014 versus S$4.5 million for 1HFY2013. This is mainly attributable to the inclusion of the Group’s Philippines and Indian subsidiaries and Indonesian assets acquired and the Group’s efforts in ramping up educational and marketing activities in these countries to further promote customers’ awareness of the Group’s products and services so that the Group can establish a leadership position in these countries. In addition to the above, the Group also incurred expenses in relation to restructuring of the Group’s Indian and Philippines subsidiaries subsequent to the acquisition in June 2013. Such one-time costs were incurred in order to align these entities as part of the Group.
The HK government’s moratorium on mainland Chinese mothers giving birth at private hospitals in Hong Kong, which came into effect beginning of 2013, had impacted on the Group’s 1HFY2014 revenue. Notwithstanding, the Group’s revenue grew 31.3% over the same period, up from S$17.9 million to S$23.5 million as strong contributions from India, Indonesia and the Philippines markets offset the lower contribution from Hong Kong.
While it remains unclear when the moratorium on women from mainland China giving birth at private hospitals in Hong Kong will be lifted, Deloitte researchers project the penetration rate for Hong Kong mothers to reach 25% by 2015, which still represents a sizable pool of potential customers for the private cord blood banking services. Moreover, according to Economist Intelligence Unit’s forecast mentioned in the Deloitte report, the birth rate in Hong Kong is expected to increase slightly, from 0.74% in 2011 to 0.76% in 2015.
The Board is pleased to announce an interim dividend of 1.0 Singapore cent, payable on 4 April 2014. While the Group does not have a formal dividend policy, the Board continues to evaluate the Group’s capital requirements and explore options to reward shareholders.
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