Full Press Release Details
Concord Medical Reports Financial Results
for the First Half of 2018
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
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
"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
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 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
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