SINGAPORE (May 12): Cordlife Holdings says 3Q17 losses narrowed to $0.4 million from $2 million a year ago.
This comes despite 4.8% lower revenue of $14.2 million as compared to $14.9 million in 3Q16 due to lower contributions from the group’s Singapore, Hong Kong and India markets which resulted from discounts given to clients in a bid to remain competitive.
The lower revenue was however offset by an increase in 3Q17 deliveries to 6,000 from 5,800 in 3Q16, which is in part due to the lower-priced service offering of cord tissue banking in Stemlife, as well as an increase in revenue contribution of diagnostic services.
Over the quarter, there was also an absence of $1.9 million in other expenses which was recorded in 3Q16 which comprised one-time employee bonuses paid in respect of the realised gains on sale of sale shares and convertible notes.
There was also no note repurchase expense in the current quarter, whereas in 3Q16, note repurchase expenses of nearly $0.2 mil were recorded due to the company’s repurchasing of $4.75 mil in principal amount of the notes.
Cost of sales fell 3.3% to $5 million from $5.2 million in the previous year as a result of lower costs of processing lower-priced cord tissue banking.
Other operating income fell 44.8% to $0.2 million from $0.3 million in the preceding year, in the absence of a grant from SPRING of approximately $0.2 million which was received in 3Q16.
At the same time, selling & marketing and administrative expenses grew 4.1% and 17% respectively compared to the previous quarters.
The former was due to higher advertising and marketing activities in India for below-the-line client acquisition costs to gain market share, and the latter resulting from an increase in foreign exchange losses arising from the depreciation of the US dollar against the SGD for the group’s bank balances held in USD.
Looking ahead, Cordlife says it remains cautiously optimistic about the market potential of its core business, and intends to continue working towards expanding its geographical presence in more Asian countries.
It intends to remain focus on its key strategies to reinforce these core competencies to unlock network value and expand through scale and scope, whilst rationalising its business operations to drive both top and bottom line growth.
The group expects its core business to remain profitable for the rest of the financial year.
