Cordlife Group profit increased 47.6% in 3Q2013

Despite revenue hit from China childbirth ban.

For the quarter ended 31 March 2013 (3Q2013), Cordlife Group Limited (Cordlife) earnings in 3Q2013 recorded a year-on-year increase of 47.6% to S$1.2 million compared to S$6.9 million over the same period last year (3Q2012).

The profit spike came notwithstanding a slight dip in revenue to S$6.7 million, which the company attributed to the ban on women from mainland China giving birth at private hospitals in Hong Kong, which came into effect beginning of this year.

Cordlife, a leading cord blood and tissue banking service provider, reported that its net profit for the nine months ended 31 March 2013 (9M2013) more than doubled to S$9.7 million from S$4.6 million in the corresponding period for the previous year (9M2012). The Group achieved its bottomline increase on the back of year-on-year revenue growth of 11.6%, which was driven by a rise in the number of client deliveries.

During the period under review, the Group also registered a S$2.7 million gain from the disposal of its 10% interest in China Stem Cells (South) Company Limited
(CSCS). Even excluding the gain from disposal, the Group achieved a 51.8% growth in net profit at S$7.0 million, in line with higher sales achieved in 9M2013.

Mr Jeremy Yee, Executive Director and Chief Executive Officer of Cordlife said: “We continue to maintain a high, consistent level of gross profit margin of about 69%, given our leadership position as Singapore’s largest private cord blood bank. With the launch of our umbilical cord tissue banking services here on 12 May 2013, we are again breaking new grounds as we ride on a growth trend of more expectant parents choosing to store their children’s cord blood and tissue. This is largely due to an increased awareness of the benefits of private cord blood and tissue banking as a result of the educational outreach efforts of our team at Cordlife and our partners in the medical field.”

Mr Yee added: “Our strategic move to acquire 10% of China Cord Blood Corporation mitigated the ban’s financial impact on the Group. In fact, we are starting to see increased contributions from our stake in China’s largest cord blood banking operator, which had been aggressively expanding its market share in the past few years. As the first foreign private cord blood bank to gain a foothold in China’s market through such an alliance, we are well-positioned to capitalise on a sunrise industry in the world’s most populous nation, where a growing, affluent middle-class is becoming more educated about healthcare options.”