Cordlife Group posts S$2m loss on fair value changes

CORDLIFE Group on Wednesday posted a net loss of S$2 million for the three months ended March 31, 2016, a reversal from net profit of S$18.1 million a year ago, largely due to fair value changes.

This represents loss per share of 0.79 Singapore cent for its third quarter of FY2016, against earnings per share of seven Singapore cents a year ago.

Last September, the group had agreed to sell to Golden Meditech Holdings Limited 7.3 million ordinary shares of par value US$0.0001 per share in US-listed China Cord Blood Corp (CCBC) and a 7 per cent senior unsecured convertible note due Oct 3, 2017, issued by CCBC in the principal amount of US$25 million.

The group then recorded fair value gain on its investment in CCBC designated at fair value through profit or loss of S$7.6 million in Q3 2015. Subsequent to the disposal of the sale shares on Oct 30, 2015, there was no such fair value gain in Q3 2016, it said.

Separately, the group also recorded fair value gain on derivatives for Q3 2015 of about S$3.7 million and subsequent to the disposal of a convertible note last November, there was no such fair value gain in Q3 2016.

Revenue for the quarter rose 4.7 per cent to S$14.9 million, mainly due to an increase in the number of client deliveries, from about 5,400 in Q3 2015 to 5,800 in Q3 2016. StemLife accounted for S$1.4 million of the increase in revenue.

Correspondingly, cost of sales increased by 15.7 per cent to S$5.2 million. StemLife accounted for S$751,000 of the total cost of sales.

For the first nine months of its financial year though, net profit was up 27.3 per cent year on year to S$14.8 million, while revenue grew 5.3 per cent to S$44 million.

In its outlook, the cord blood bank firm said it continues to ride on the growth of emerging Asian nations.

"While weak economic sentiments in Singapore and the region may dampen healthcare expenditure, the group remains committed to drive top-line growth as well as develop its market leadership in cord blood and cord lining banking in Asia while continuing with its plans to introduce new consumer healthcare products catering to the mother and child," it said.