BEIJING, Aug. 29, 2018 /PRNewswire/ -- Concord Medical
Services Holdings Limited ("Concord Medical" or the "Company")
(NYSE: CCM), a leading cancer hospital operations management
solutions provider and operator of a network of radiotherapy and
diagnostic imaging centers in China, today announced its unaudited
consolidated financial results for the six months ended
June 30, 2018[1].
2018 First Half Highlights
Total net revenue was RMB105.1
million ($15.9 million) in the
first half of 2018, representing a 49.0% decrease from total net
revenue of RMB206.2 million in the
same period last year. Total net revenue included net revenue from
the network business of RMB79.4
million ($12.0 million) and
net revenue from the hospital business of RMB25.7 million ($3.9
million).
Gross profit was RMB23.9 million
($3.6 million) in the first half of
2018, representing a 66.5% decrease from RMB71.3 million in the first half of 2017. The
gross profit margin for the first half of 2018 was 22.8%, compared
to 34.6% for the same period last year.
Net loss attributable to ordinary shareholders in the first half
of 2018 was RMB128.1 million
($19.4 million), compared to
RMB101.8 million in the same period
last year.
Both basic and diluted loss per American Depositary Share
("ADS")[2] in the first half of 2018 were both
RMB2.95 ($0.45), compared to RMB2.34 in the same period last year.
Non-GAAP net loss in the first half of 2018 was RMB121.5 million ($18.4
million), compared to non-GAAP net loss of RMB100.1 million in the same period last year.
Non-GAAP basic and diluted loss per ADS in the first half of 2018
were both RMB2.81 ($0.42).
Adjusted EBITDA[3] (non-GAAP) was negative
RMB73.3 million ($11.1 million) in the first half of 2018,
compared to negative RMB3.9 million
in the same period last year.
Dr. Jianyu Yang, Chairman and
Chief Executive Officer of Concord Medical, commented, "Changes in
the policies regarding the hospital partners have further led to
the closure of our centers, which put pressure on our operating
income in the first half of 2018 and presented us with challenges.
Nevertheless, our network business still has new demands. Within
the past six months, we developed new centers with reliable
partners in suitable locations, including the co-established
cooperative radiotherapy center at PKU Healthcare Zibo Hospital and
the comprehensive management cooperative center for the departments
of radiotherapy and nuclear medicine at PKU International Hospital.
Based on our extensive experiences in radiotherapy and imaging
diagnosis over years, we believe our network business would
continue to provide Chinese cancer patients with high-quality
diagnosis and treatment services."
"Although the revenue from the network business shrinks, our
self-operating independent cancer hospital business is steadily
growing and developing. The revenue from the hospital business in
the first half of 2018 had a year-on-year increase of 160%, while
its percentage of the Company's total revenue increased from 5%
last year to 25% this year."
"The cumulative number of patient
visits within the first half of 2018 at our independent cancer
center in Shanghai had a good
increase, compared with the number of the first half of 2017.
Shanghai Concord Cancer Center is an outpatient department that
integrates imaging diagnosis, radiotherapy, chemotherapy, and
targeted therapy. At present this center has started to develop
joint consultation with MD Anderson Cancer Center in the United States and our Concord
International Hospital in Singapore, offering international diagnosis
and treatment plans for patients with certain demands."
"The revenue of the Concord International Hospital in
Singapore in the first half of
2018 had a dramatical increase of 118%, compared with that of the
same period in the last year, while the net loss had also decreased
by 41%, compared with that in last year. As for operational data,
the number of patients visits in surgery, radiotherapy, and
internal medicine has been improved in Concord International
Hospital in Singapore. Among them,
the number of surgical patient visits was 359 in the first half of
2018, a 122% increase from 162 in the first half of 2017."
"In general, 2018 is the start of a full upgrade of the
Company's business. Our new business mode that is focusing on
self-established and operating cancer hospitals is steadily growing
and developing, which relieves the influence of adverse impacts on
one hand, and lays a solid foundation for our future development on
the other. We have high hopes and firmly believe that we can
provide good-quality and efficient medical services for more cancer
patients in the future."
2018 First Half Financial Results
Network Business
Net revenue from the network business was RMB79.4 million ($12.0
million), representing a 59.6% decrease from net revenue of
RMB196.4 million in the first half of
2017, primarily attributable to the closure of certain centers in
our network of centers. With one center closed in the first half of
2018, the Company operated a network of 30 centers in 21 cities in
China as of June 30, 2018.
Cost of revenue of the network business was RMB42.9 million ($6.5
million), representing a 60.8% decrease from RMB109.5 million in the first half of 2017.
Gross profit from the network business was RMB36.5 million ($5.5
million), representing a 57.9% decrease from RMB86.8 million in the first half of 2017. The
gross profit margin for the first half of 2018 was 46.0%, compared
to 44.2% for the same period last year.
Selling expenses of the network business were RMB9.9 million ($1.5
million), representing a 67.3% decrease from RMB30.3 million in the first half of 2017.
Selling expenses as a percentage of net revenue was 12.5% in the
first half of 2018, compared to 15.4% in the first half of 2017.
The decrease in selling expenses of the network business was mainly
due to reduced marketing, conference, office and travel
expenses.
General and administrative expenses of the network business were
RMB82.6 million ($12.5 million), representing a 12.1% decrease
from RMB94.0 million in the first
half of 2017. General and administrative expenses as a percentage
of net revenue was 104.0% in the first half of 2018, compared to
47.9% in the same period last year. The increase in general and
administrative expenses as a percentage of net revenue was mainly
due to the counsel fee and travel expense related to the closure of
certain centers.
Compared to RMB11.1 million in the
same period last year, capital expenditures were RMB4.8 million ($0.7
million) in the first half of 2018.
Accounts receivable were RMB105.9
million ($16.0 million) as of
June 30, 2018, compared to
RMB127.2 million as of December 31, 2017. The average period of sales
outstanding for accounts receivable ("Days Sales Outstanding") was
263 days in the first half of 2018.
As of June 30, 2018, the Company
had bank loan totaling RMB592.6
million ($89.6 million).
During the first half of 2018, the Company handled 5,354 patient
treatment cases and 70,562 patient diagnostic cases, representing a
37.9% decrease and a 38.7% decrease from the same period last year,
respectively, mainly due to the closure of certain centers during
the past year and first half of 2018.
Hospital Business
Hospital business includes Singapore Concord International
Hospital, Datong Meizhong Jiahe Cancer Hospital, Shanghai Concord
Cancer Hospital and Guangzhou Concord Cancer Hospital.
Net revenue from the hospital business was RMB25.7 million ($3.9
million) in the first half of 2018, representing a 160.0%
increase from net revenue of RMB9.9
million in the first half of 2017, mainly due to the
increased revenue from Singapore Concord International
Hospital.
Cost of service of the hospital business in the first half of
2018 was RMB38.3 million
($5.8 million), a 50.2% increase from
cost of service of RMB25.5 million in
the first half of 2017, mainly because of the increased revenue of
Singapore Concord International Hospital.
Gross loss from the hospital business was RMB12.6 million ($1.9
million) in the first half of 2018, a 19.2% decrease from
RMB15.6 million in the same period
last year, mainly due to the increased revenue of Singapore Concord
International Hospital.
Selling expenses of the hospital business were RMB0.7 million ($0.1
million) in the first half of 2018. The selling expenses of
the hospital business were RMB0.2
million in the first half of 2017.
General and administrative expenses of the hospital business
were RMB31.8 million ($4.8 million) in the first half of 2018, of which
employee benefit expenses were RMB10.8
million ($1.6 million). In the
same period of last year, general and administrative expenses of
the hospital business were RMB21.9
million.
Compared to RMB72.6 million in the
first half of 2017, capital expenditures of the hospital were
RMB282.1 million ($42.6 million) in the first half of 2018, which
was mainly related to the construction fees and medical equipment
payment for Shanghai Concord Cancer Hospital and Guangzhou Concord
Cancer Hospital.
As of June 30, 2018, accounts
receivable from hospital business is RMB5.7
million ($0.9 million),
representing a 21.3% increase from accounts receivable of
RMB4.7 million as of December 31, 2017. The number of Days Sales
Outstanding was 44 days in the first half of 2018.
Recent Developments
Concord Medical and the investment institutions led by CICC
Capital Management Company Limited ("CICC Capital"), a wholly-owned
subsidiary of China International Capital Corporation Limited
("CICC"), jointly made a strategic investment in Concord Medical's
subsidiary, Beijing Meizhong Jiahe Hospital Management Co., Ltd.
("Meizhong Jiahe"). The total investment was RMB 1.5 billion. After completion of the
investment, the total shares held by the institutions led by CICC
Capital accounted for 37.5% of the equity interests of Meizhong
Jiahe.
Shanghai Concord Medical Imaging Diagnostic Center ("Imaging
Center"), the first independent imaging diagnostic center of
Concord Medical, obtained an independent imaging diagnostic
license. The Imaging Center is expected to introduce world-class
diagnostic technology and management services, cover the Medical
Center and the Yangtze River Delta region through a remote sharing
consultation platform, and provide a full range of imaging
diagnosis and high-quality services for domestic and foreign
commercial insurance patients.
Notes:
|
[1] This
announcement contains translations of certain RMB amounts into U.S.
dollars at specified rates solely for the convenience of the
reader. Unless otherwise noted, all translations of RMB into U.S.
dollars are made at a rate of RMB6.6171 to $1.00, the noon buying
rate in New York City for cable transfers payable in RMB, as
certified for customs purposes by the Federal Reserve Bank of New
York on June 30, 2018.
|
[2] Each
ADS represents three Class A ordinary shares of the
Company.
|
[3]
Adjusted EBITDA is defined as net income plus interest, taxes,
depreciation and amortization, share-based compensation expenses,
and other adjustments. Other adjustments include foreign exchange
gain, gain from disposal of property, plant and equipment and other
income.
|
About Concord Medical
Concord Medical Services Holdings
Limited is a leading specialty hospital management solution
provider and operator of the largest network of radiotherapy and
diagnostic imaging centers in China. As of June 30,
2018, the Company operated a network of 30 centers with 21
hospital partners that spanned 21 cities and 14 provinces and
administrative regions in China.
Under long-term arrangements with top-tier hospitals in
China, the Company provides
radiotherapy and diagnostic imaging equipment and manages the daily
operations of these centers, which are located on the premises of
its hospital partners. The Company also provides ongoing training
to doctors and other medical professionals in its network of
centers to ensure a high level of clinical care for patients. For
more information, please see http://ir.ccm.cn.
Safe Harbor Statement
This announcement contains forward-looking statements. These
forward-looking statements can be identified by words or phrases
such as "will," "expects," "anticipates," "future," "intends,"
"plans," "believes," "estimates" and similar expressions.
Forward-looking statements are inherently subject to uncertainties
and contingencies beyond the Company's control and based upon
premises with respect to future business decisions, which are
subject to change. A number of important factors could cause actual
results to differ materially from those contained in any
forward-looking statement. The Company does not undertake any
obligation to update any forward-looking statement, except as
required under applicable law.
About Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in
accordance with United States Generally Accepted Accounting
Principles ("GAAP"), Concord Medical uses certain non-GAAP
measures. The Company presents certain of its financial information
that is adjusted from results based on GAAP to exclude the impact
of share-based compensation expense. The Company believes excluding
share-based compensation expense from its GAAP financial measures
is useful for its management and investors to assess and analyze
the Company's core operating results, as such expense is not
directly attributable to the underlying performance of the
Company's business operations and do not impact its current cash
earnings. Concord Medical also believes these non-GAAP measures
excluding share-based compensation expense are important in helping
investors to understand the Company's current financial performance
and future prospects and to compare business trends among different
reporting periods on a consistent basis. In addition, Concord
Medical also presents the non-GAAP measure of Adjusted EBITDA,
which is defined in this announcement as net income plus interest,
taxes, depreciation and amortization, and share-based compensation
expenses and other adjustments. Other adjustments include foreign
exchange gain, gain from disposal of property, plant and equipment
and other income. Furthermore, Adjusted EBITDA eliminates the
impact of items that the Company does not consider to be indicative
of the performance of the network business and hospital business.
The Company believes investors will similarly use Adjusted EBITDA
as one of the key metrics to evaluate its financial performance and
to compare its current operating results with corresponding
historical periods and with other companies in the healthcare
services industry. The presentation of these additional measures
should not be considered a substitute for or superior to GAAP
results or as being comparable to results reported or forecasted by
other companies. The non-GAAP measures have been reconciled to GAAP
measures in the attached financial information.
Concord Medical
Services Holdings Co., Ltd.
|
Consolidated
Balance Sheets
|
(in
thousands)
|
|
|
December 31,
2017
|
June 30,
2018
|
|
RMB
|
RMB
|
US$
|
|
(audited)
|
(Unaudited)
|
(Unaudited)
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
98,191
|
459,968
|
69,512
|
Restricted cash,
current portion
|
563,986
|
211,727
|
31,997
|
Accounts
receivable
|
131,952
|
111,592
|
16,864
|
Inventories
|
6,284
|
5,195
|
785
|
Prepayments and other
current assets
|
264,723
|
299,275
|
45,228
|
Non-current assets
held for sale
|
27,100
|
5,048
|
763
|
Net investments in
direct financing leases, current portion
|
18,900
|
23,646
|
3,573
|
Total current
assets
|
1,111,136
|
1,116,451
|
168,722
|
|
|
|
|
Non-current
assets
|
|
|
|
Property, plant and
equipment, net
|
793,571
|
815,698
|
123,272
|
Intangible assets,
net
|
7,799
|
6,946
|
1,050
|
Deposits for
non-current assets
|
266,180
|
462,947
|
69,962
|
Net investments in
direct financing leases, non-current portion
|
54,052
|
46,891
|
7,086
|
Equity method
investments
|
732,167
|
740,286
|
111,875
|
Cost method
investment
|
22,160
|
22,160
|
3,349
|
Other non-current
assets
|
30,392
|
31,223
|
4,719
|
Prepaid land lease
payments
|
447,933
|
443,351
|
67,001
|
Prepayment for long
term investment
|
-
|
480,688
|
72,643
|
Total non-current
assets
|
2,354,254
|
3,050,190
|
460,957
|
|
|
|
|
Total
assets
|
3,465,390
|
4,166,641
|
629,679
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Short-term bank
borrowings
|
512,222
|
480,870
|
72,671
|
Long-term bank
borrowings, current portion
|
197,139
|
110,364
|
16,679
|
Accounts
payable
|
4,563
|
5,536
|
837
|
Accrued expenses and
other liabilities
|
385,919
|
408,765
|
61,774
|
Income tax
payable
|
5,990
|
5,512
|
833
|
Dividend
payable
|
2,338
|
2,378
|
359
|
Total current
liabilities
|
1,108,171
|
1,013,425
|
153,153
|
|
|
|
|
Non-current
liabilities
|
|
|
|
Long-term bank
borrowings, non-current portion
|
284,584
|
1,375
|
208
|
Deferred tax
liabilities, non-current portion
|
73,577
|
70,970
|
10,725
|
Long-term secured
borrowings
|
163,498
|
123,711
|
18,696
|
Other long term
liabilities
|
73,392
|
77,751
|
11,750
|
Redeemable
noncontrolling interest
|
396,281
|
403,279
|
60,945
|
Amount due to related
parties, non-current portion
|
350,969
|
344,725
|
52,096
|
Total non-current
liabilities
|
1,342,301
|
1,021,811
|
154,420
|
|
|
|
|
Total
liabilities
|
2,450,472
|
2,035,236
|
307,573
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
Ordinary
shares
|
105
|
105
|
16
|
Treasuary
stock
|
(8)
|
(8)
|
(1)
|
Additional paid-in
capital
|
1,860,763
|
1,860,763
|
281,205
|
Accumulated other
comprehensive loss
|
(47,418)
|
(52,191)
|
(7,887)
|
Accumulated
deficit
|
(879,393)
|
(1,007,519)
|
(152,260)
|
Total Concord
Medical Services Holdings Limited
shareholders' equity
|
934,049
|
801,150
|
121,073
|
Noncontrolling
interests
|
80,869
|
1,330,255
|
201,033
|
|
|
|
|
Total
equity
|
1,014,918
|
2,131,405
|
322,106
|
|
|
|
|
Total liabilities
and equity
|
3,465,390
|
4,166,641
|
629,679
|
Concord Medical
Services Holdings Co., Ltd.
|
Consolidated
Profit & Loss
|
(in thousands,
except for number of ADS and per ADS data)
|
|
|
June 30,
2017
|
June 30,
2018
|
|
RMB
|
RMB
|
US$
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
Revenues, net of
business tax , value-added tax and
related surcharges:
|
|
|
|
Network
|
196,350
|
79,393
|
11,998
|
Hospital
|
9,893
|
25,722
|
3,887
|
Total net
revenues
|
206,243
|
105,115
|
15,885
|
|
|
|
|
Cost of
revenues:
|
|
|
|
Network
|
(109,512)
|
(42,882)
|
(6,481)
|
Hospital
|
(25,458)
|
(38,287)
|
(5,786)
|
Total cost of
revenues
|
(134,970)
|
(81,169)
|
(12,267)
|
|
|
|
|
Gross
profit
|
71,273
|
23,946
|
3,618
|
|
|
|
|
Operating
expenses:
|
|
|
|
Selling
expenses
|
(30,513)
|
(10,621)
|
(1,605)
|
General and
administrative expenses
|
(115,802)
|
(114,351)
|
(17,281)
|
Impairment of
long-lived assets
|
(28)
|
-
|
-
|
|
|
|
|
Operating
loss
|
(75,070)
|
(101,026)
|
(15,268)
|
Interest
expense
|
(37,809)
|
(33,381)
|
(5,045)
|
Foreign exhange
gain
|
9,636
|
10,693
|
1,616
|
Gain (loss) from
disposal of property, plant and equipment
|
973
|
(2,060)
|
(311)
|
Interest
income
|
6,728
|
5,129
|
775
|
Equity pick up of
equity investee
|
3,967
|
(3,438)
|
(520)
|
Other
income
|
3,002
|
2,161
|
327
|
|
|
|
|
Loss before income
tax
|
(88,573)
|
(121,922)
|
(18,426)
|
Income tax
expenses
|
(15,847)
|
(5,949)
|
(899)
|
Net
loss
|
(104,420)
|
(127,871)
|
(19,325)
|
|
|
|
|
Net (loss) gain
attributable to noncontrolling interests
|
(2,641)
|
255
|
39
|
|
|
|
|
Net loss
attributable to ordinary shareholders
|
(101,779)
|
(128,126)
|
(19,364)
|
|
|
|
|
Loss per
ADS
|
|
|
|
Basic
|
(2.34)
|
(2.95)
|
(0.45)
|
Diluted
|
(2.34)
|
(2.95)
|
(0.45)
|
|
|
|
|
Weighted average
number of ADS outstanding:
|
|
|
|
Basic
|
43,543,956
|
43,363,992
|
43,363,992
|
Diluted
|
43,543,956
|
43,363,992
|
43,363,992
|
|
|
|
|
Other
comprehensive income, net of tax
|
|
|
|
Foreign currency
translation
|
3,041
|
4,773
|
721
|
Total other
comprehensive income, net of tax
|
3,041
|
4,773
|
721
|
Comprehensive
loss
|
(101,379)
|
(123,098)
|
(18,604)
|
Comprehensive loss
attributable to noncontrolling interests
|
(931)
|
(614)
|
(92)
|
Comprehensive loss
attributable to Concord Medical
Services Holdings Limited's shareholders
|
(100,448)
|
(122,484)
|
(18,512)
|
Reconciliations of
non-GAAP results of operations measures to the nearest comparable
GAAP measures (*) (in RMB thousands, except ADS data,
unaudited)
|
|
|
|
|
|
|
|
|
|
For the six months
ended June 30, 2017
|
|
For the six months
ended June 30, 2018
|
|
GAAP
Measure
|
Adjustment
|
Non-GAAP
Measure
|
|
GAAP
Measure
|
Adjustment
|
Non-GAAP
Measure
|
Operating
loss
|
(75,070)
|
4,272
|
(70,798)
|
|
(101,026)
|
6,341
|
(94,685)
|
Net
loss
|
(104,420)
|
4,272
|
(100,148)
|
|
(127,871)
|
6,341
|
(121,530)
|
Basic loss per
ADS
|
(2.34)
|
0.10
|
(2.24)
|
|
(2.95)
|
0.15
|
(2.81)
|
Diluted loss per
ADS
|
(2.34)
|
0.10
|
(2.24)
|
|
(2.95)
|
0.15
|
(2.81)
|
|
|
|
|
|
|
|
|
(*) The only
adjustment is share-based compensation.
|
|
|
|
|
|
Reconciliation
from net loss to adjusted EBITDA(*) (in RMB thousands,
unaudited)
|
|
|
|
|
|
|
|
For the six
months ended
|
For the six
months ended
|
|
June 30,
2017
|
June 30,
2018
|
Net
loss
|
(104,420)
|
(127,871)
|
Interest
expenses, net
|
31,081
|
28,252
|
Income
tax expenses
|
15,847
|
5,949
|
Depreciation and amortization
|
62,901
|
24,835
|
Share-based compensation
|
4,272
|
6,341
|
Other
adjustments
|
(13,611)
|
(10,794)
|
Adjusted
EBITDA
|
(3,930)
|
(73,288)
|
EBITDA
margin
|
-2%
|
-92%
|
(*) Definition of
adjusted EBITDA: Adjusted EBITDA is defined as net income plus
interest, taxes, depreciation and amortization, share-based
compensation expenses
and other adjustments. Other adjustments include foreign exchange
gain, gain (loss) from disposal of property, plant and equipment
and other income.
|
View original
content:http://www.prnewswire.com/news-releases/concord-medical-reports-financial-results-for-the-first-half-of-2018-300703971.html
SOURCE Concord Medical Services Holdings Limited