Full Press Release Details
Concord Medical Reports Financial Results
for the First Half of 2019
BEIJING, August 23, 2019 /PRNewswire/ --
Concord Medical Services Holdings Limited ("Concord Medical" or the "Company") (NYSE: CCM), a specialty hospital
management group and an operator of the network of radiotherapy and diagnostic imaging centers in China, today announced its unaudited
consolidated financial results for the six months ended June 30, 2019[1].
2019 First Half Highlights
- Total net revenues were RMB99.5
million ($14.5 million) in the first half of 2019, a 5.3% decrease from total net revenues of RMB105.1 million in the same period
last year. Total net revenues included net revenue from the network business of RMB68.0 million ($9.9 million) and net revenue
from hospital business of RMB31.5 million ($4.6 million).
- Gross profit was RMB3.1 million
($0.5 million) in the first half of 2019, representing an 87.0% decrease from RMB23.9 million in the first half of 2018. The gross
profit margin was 3.1% for the first half of 2019, compared to 22.8% for the same period last year.
- Net loss attributable to ordinary
shareholders in the first half of 2019 was RMB140.1 million ($20.4 million), compared to RMB128.1 million in the same period last
- Basic and diluted loss per American
Depositary Share ("ADS")[2] in the first half of 2019 were both RMB6.10 ($0.89), compared to RMB2.95, respectively,
in the same period last year.
- Non-GAAP net loss in the first
half of 2019 was RMB149.3 million ($21.7 million), compared to non-GAAP net loss of RMB121.5 million in the same period last year.
Non-GAAP basic and diluted loss per ADS in the first half of 2019 were both RMB3.44 ($0.50), compared to RMB2.81 in the same period
- Adjusted EBITDA[3]
(non-GAAP) was negative RMB108.3 million ($15.8 million) in the first half of 2019, compared to negative RMB73.3 million in the
same period last year.
Dr. Jianyu Yang, Chairman and Chief Executive
Officer of Concord Medical, commented, "With the smooth construction of the Company's hospitals, the corresponding costs
have increased and have had an impact on the Company's financial results. However, the year 2018-2019 was an important stage for
the Company's business development. In 2018, the Company received financing from strategic investors. In 2019, the Company's
three premium cancer hospitals are all under construction. Beijing Proton Medical Center and Guangzhou Concord Cancer Center are
expected to commence the operations in 2020. The Company believes that its performance will be greatly improved."
"The proportion of revenue generated
from the hospital business is increasing gradually. Revenue from the Company's hospital business accounted for 32% of total
revenue during the first half of 2019, representing an 8% increase from 24% in the first half of 2018. During the first half of
2019, Shanghai Meizhong Jiahe Cancer Center (also known as Shanghai Concord Medical Cancer Center) handled 4,758 patient treatment
cases and patient diagnostic cases, representing a 190% increase from the same period last year."
"In the future, the Company will
utilize its strengths in cancer treatment and explore business opportunities in the operation and management of cancer franchise
hospitals and proton center operations."
2019 First Half Financial Results
Net revenues from the network business
were RMB68.0 million ($9.9 million), representing a 14.4% decrease from net revenues of RMB79.4 million in the first half of 2018,
primarily attributable to the closure of certain centers in our network of centers. With one center closed in the first half of
2019, the Company operated a network of 30 centers in 20 cities in China as of June 30, 2019.
Cost of revenue of the network business
was RMB34.8 million ($5.1 million), representing a 18.9% decrease from RMB42.9 million in the first half of 2018.
Gross profit from the network business
was RMB33.2 million ($4.8 million), representing a 9.0% decrease from RMB36.5 million in the first half of 2018. The gross profit
margin for the first half of 2019 was 48.8%, compared to 46.0% for the same period last year.
Selling expenses of the network business
were RMB9.3 million ($1.4 million), representing a 6.1% decrease from RMB9.9 million in the first half of 2018. Selling expenses
as a percentage of net revenues was 13.7% in the first half of 2019, compared to 12.5% in the first half of 2018. 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 RMB82.5 million ($12.1 million), representing a 0.3% increase from RMB82.6 million in the first half
of 2018. General and administrative expenses as a percentage of net revenues were 121.9% in the first half of 2019, compared to
104.0% in the same period last year. The increases were mainly due to the counsel fee and travel expense related to the closure
Comparing to RMB4.8 million in the same
period last year, capital expenditures increased to RMB24.8 million ($3.6 million) in the first half of 2019 primarily for procuring
equipment for network centers.
Accounts receivable were RMB85.0 million
($12.4 million) as of June 30, 2019, compared to RMB82.0 million as of December 31, 2018. The average period of sales outstanding
for accounts receivable (also known as "Days Sales Outstanding") was 221 days in the first half of 2019.
During the first half of 2019, the Company
handled 5,334 patient treatment cases and 74,721 patient diagnostic cases, representing a 0.4% decrease and a 5.9% increase from
the same period last year, respectively. The increase in patient diagnostic cases was mainly due to the counting of the cases
from a center which entered into network contract with the Company in December 2018.
Net revenues from the hospital business
were RMB31.5 million ($4.6 million) in the first half of 2019, representing a 22.6% increase from net revenues of RMB25.7 million
in the first half of 2018, mainly due to the consolidation of Shanghai Meizhong Jiahe Cancer Center Co., Ltd. in the fourth quarter
Cost of service of the hospital business
in the first half of 2019 was RMB61.6 million ($9.0 million), a 60.8% increase from cost of service of RMB38.3 million in the first
half of 2018, mainly because of the consolidation of Shanghai Meizhong Jiahe Cancer Center Co., Ltd. in the fourth quarter of 2018.
Gross loss from the hospital business was
RMB30.1 million ($4.4 million) in the first half of 2019, compared to RMB12.6 million in same period last year.
Selling expenses of the hospital business
were RMB1.5 million ($0.2 million) in the first half of 2019, representing a 114.3% increase from selling expenses of RMB0.7 million
in the first half of 2018. The increase was mainly due to the consolidation of Shanghai Meizhong Jiahe Cancer Center Co., Ltd.
in the fourth quarter of 2018.
General and administrative expenses of
the hospital business were RMB57.0 million ($8.3 million) in the first half of 2019, of which employee benefit expenses were RMB19.9
million ($2.9 million). In the same period of last year, general and administrative expenses of the hospital business were RMB31.8
million. The increase was mainly due to the increase in salary and consultation fees for hospitals.
Comparing to RMB282.1 million in the first
half of 2018, capital expenditures of the hospital were RMB410.5 million ($59.8 million) in the first half of 2019, which was mainly
related to the construction fees and medical equipment payment for Beijing Proton Medical Center, Shanghai Concord Cancer Center
and Guangzhou Concord Cancer Center.
As of June 30, 2019, accounts receivable
from hospital business were RMB10.9 million ($1.6 million), a 55.7% increase from accounts receivable of RMB7.0 million as of December
31, 2018. The number of Days Sales Outstanding was 51 days in the first half of 2019.
As of June 30, 2019, the Company had bank
loan totaling RMB1.1 billion ($163.0 million).
Starting from February 20, 2019, the basic
medical services of Shanghai Meizhong Jiahe Cancer Center (also known as Shanghai Concord Medical Cancer Center) used by Shanghai
medical insurance participants have been fully covered by medical insurance. Moreover, effective on July 22, 2019, Shanghai Meizhong
Jiahe Cancer Center has become a designated hospital in Shanghai, allowing the general outpatient services and the major outpatient
services (including radiotherapy and chemotherapy for malignant tumors) to be settled by medical insurance according to the standard
of the local third-level hospitals.
Shanghai Meizhong Jiahe Medical Imaging
Diagnostic Center (also known as Shanghai Concord Medical Imaging Diagnostic Center) has completed the construction stage and is