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Cordlife Group reports Q3 net profit of S$843,000 on new HK unit, better margins
PRIVATE cord blood banker Cordlife Group has turned a profit in the third quarter, helped by a newly acquired subsidiary.
Earnings stood at S$843,000 for the three months to March 31, reversing a net loss of S$401,000 in the same period the year before, according to unaudited financial statements released on Friday evening.
The profit came on a revenue of S$17.71 million, up by 24.5 per cent on the previous year, and marked the healthcare group's fourth straight quarter in the black. Cordlife noted that revenue growth has outpaced the rise in cost of sales, lifting the group's gross profit margin.
Contributions from Hong Kong cord blood bank Healthbaby Biotech, which Cordlife acquired in January, made up S$1.8 million - or about half - of the increase in turnover.
"The recent acquisition of Healthbaby validates the group's approach to growth," Cordlife said in its financial statement, noting that the unit has started cross-selling Cordlife services to customers.
Still, the Singapore and India markets were the main revenue drivers, according to the group, which also has operations in Indonesia, Malaysia and the Philippines.
Revenue per customer was up in India on lower discounts, while Singapore turnover came in higher on a growth in clients and the Philippines saw contract prices up.
The group said that it expects to report a full-year net profit for 2018, barring unforeseen circumstances and exceptional non-operating items - a turnaround from a loss in the year prior.
Cordlife, which plans to grow its non-invasive diagnostics services offerings, is upbeat on the outlook for the stem cell banking industry, citing recent industry investment activity in cellular immunotherapies.
Executive director Michael Weiss, who has been interim group chief since predecessor Wong Chiang Yin's April departure, said in a media statement: "We will continue to drive profitability organically and explore earnings-accretive acquisition opportunities.
"With our extensive reach in Asia and amid growing public awareness of the therapeutic potential of stem cells for disease treatment, we are well placed for further growth."
The counter last closed at S$0.71 on Thursday.