Full Press Release Details
Reports Financial Results for the First Half of 2022
23, 2022 /PRNewswire/ -- Concord Medical Services Holdings Limited ("Concord Medical" or the "Company") (NYSE:
CCM), a healthcare provider specialized in cancer treatment, research, education and prevention by establishing proton centers and cancer
hospitals and operating an extensive network of radiotherapy and diagnostic imaging centers in China, today announced its unaudited consolidated
financial results for the six months ended June 30, 20221.
net revenues were RMB144.3 million (US$21.5 million) in the first half of 2022, representing a 25.2% decrease from total net revenues
of RMB192.9 million in the same period last year. Total net revenues included the net revenues from the hospital business of RMB82.9
million (US$12.4 million) and the net revenues from the network business of RMB61.4 million (US$9.1 million).
loss was RMB88.7 million (US$13.2 million) in the first half of 2022, compared to the gross profit of RMB2.4 million in the first half
of 2021. The gross loss margin was 61.5% for the first half of 2022, compared to the gross profit margin of 1.2% for the same period
loss attributable to ordinary shareholders in the first half of 2022 was RMB114.7 million (US$17.1 million), compared to RMB90.3 million
in the same period last year.
and diluted loss per share for Class A and Class B ordinary shares2 in the first half of 2022 were both RMB0.87 (US$0.13),
compared to RMB2.53, respectively, in the same period last year.
loss in the first half of 2022 was RMB270.0 million (US$40.3 million), compared to non-GAAP net loss of RMB163.0 million in the same
period last year. Non-GAAP basic and diluted loss per share for Class A and Class B ordinary shares in the first half of 2022 were
both RMB0.93 (US$0.14), compared to RMB2.46 in the same period last year.
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 RMB 6.6981 to US$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, 2022.
2 The Company adjusts for the accretion
of mezzanine equity in the calculation of loss attributable to ordinary shareholders of the Company used in the loss per share for Class
A and Class B ordinary shares calculation.
3 Non-GAAP net loss and non-GAAP basic
and diluted loss per share for Class A and Class B ordinary shares are defined as their most directly comparable GAAP measures excluding
the impact of share-based compensation expenses.
EBITDA4 (non-GAAP) was negative RMB194.3 million (US$29.0 million) in the first half of 2022, compared to negative RMB127.7
million in the same period last year.
Chairman and Chief Executive Officer of Concord Medical, commented, "In the first half of 2022, our business was affected by the
resurgence of COVID-19 pandemic caused by the highly contagious Omicron variant. In particular, our three medical institutions located
in Shanghai temporarily closed since April 2022 for approximately two or three months, respectively. Our network business was also restricted
by the COVID-19 resurgence, which affected the progress of order completion in the first half of 2022.
"The good news is, however, the recent performance of our Shanghai
Meizhong Jiahe Cancer Center ("Shanghai Outpatient Department") has gradually returned to the level before the COVID-19 pandemic.
Shanghai Meizhong Jiahe Medical Image Diagnosis Limited ("Shanghai Imaging Center"), which is located in the Shanghai Xinhongqiao
International Medical Park (the "Xinhongqiao Park"), will also usher in new business opportunities. We expect that the gradual
opening of the other medical institutions with differentiated expertise in the Xinhongqiao Park will drive patients to our Shanghai Imaging
Center for high-quality diagnostic imaging services and contribute to our revenue.
Concord Cancer Center ("Guangzhou Hospital"), which commenced operation in June 2021, is in the ramp-up period with improving
operational performance evidenced by several operating indicators, such as the occupancy rate of patient beds, and the number of outpatient
and inpatient visits. Notably, the proton center of Guangzhou Hospital is expected to start clinical trials in the second half of 2022,
reaching a new milestone."
business is currently on track. We will accelerate the completion of existing orders and execute our market expansion as planned. Let's
look forward to the good performance of Concord Medical for the full year of 2022."
Half Financial Results
from the hospital business were RMB82.9 million (US$12.4 million) in the first half of 2022, representing a 29.2% increase from net
revenues of RMB64.2 million in the first half of 2021, mainly due to the launch and ramp-up of Guangzhou Hospital since June
EBITDA is defined as net income/(loss) plus interest expenses, net, income tax expenses, depreciation and amortization, share-based compensation
expenses and other adjustments. Other adjustments include foreign exchange gain, net, and other income (expense), net.
Net revenues from the network business were RMB61.4
million (US$9.1 million), representing a 52.3% decrease from net revenues of RMB128.7 million in the first half of 2021, mainly because
the delivery and acceptance process of our medical solutions was negatively affected by the COVID-19 outbreak in the second quarter
of the hospital business in the first half of 2022 was RMB179.7 million (US$26.8 million), representing an 89.4% increase from cost of
revenues of RMB94.9 million in the first half of 2021, mainly because the labor cost increased for Guangzhou Hospital, which has been
in operation since June 2021.
Cost of revenues of the network business was RMB53.3
million (US$8.0 million), representing a 44.3% decrease from RMB95.7 million in the first half of 2021, generally in line with the decrease
in the net revenues from medical solutions caused by the COVID-19.
Gross (Loss)/Profit and Gross Margin
Gross loss from the hospital business was RMB96.8
million (US$14.4 million) in the first half of 2022, compared to RMB30.7 million in the same period last year. The gross loss margin of
the hospital business for the first half of 2022 was 116.8%, compared to the gross loss margin of 47.8% for the same period last year.
The decrease in gross profit margin of the hospital business was primarily attributable to (1) the substantial labor cost for Guangzhou
Hospital, which was still at the ramp-up stage with comparatively low utilization rate, and (2) the decrease in revenue generated from
our medical institutions in Shanghai because of the regional resurgence of COVID-19 pandemic in the first half of 2022.
Gross profit from the network business was RMB8.1
million (US$1.1 million), representing a 75.6% decrease from RMB33.0 million in the first half of 2021. The gross profit margin of the
network business for the first half of 2022 was 13.2%, compared to the gross profit margin of 25.6% for the same period last year. The
decrease in gross profit margin of the network business was primarily attributable to the decrease in gross profit margin of medical solutions
in the first half of 2022.
Selling expenses were RMB26.4 million (US$3.9
million) in the first half of 2022, representing a 93.3% increase from RMB13.7 million in the first half of 2021. Selling expenses as
a percentage of net revenues was 18.3% in the first half of 2022, compared to 7.1% in the first half of 2021. The increase in selling
expenses was mainly due to the increases in marketing expenses and travel related expenses as a result of the opening of our Guangzhou
Hospital since June 2021.
General and administrative expenses were RMB130.5
million (US$19.5 million) in the first half of 2022, of which employee benefit expenses were RMB75.7 million (US$11.3 million). In the
same period of last year, general and administrative expenses were RMB172.6 million. The decrease was mainly because (1) the employee
benefit expenses of Guangzhou Hospital's medical staff were recognized in general and administrative expenses before the formal
operation of the Guangzhou Hospital, which were subsequently recognized in cost of revenues after the formal operation since June 2021,
and (2) the network business reduced as a result of the negative impact of COVID-19. General and administrative expenses as a percentage
of net revenues was 90.4% in the first half of 2022, compared to 89.5% in the first half of 2021.
Capital Expenditures
Comparing to RMB414.4 million in the first half
of 2021, capital expenditures were RMB184.0 million (US$27.5 million) in the first half of 2022, mainly due to (1) the decrease in construction
fees and medical equipment payment for our hospital business, and (2) the reduced demands of procuring equipment for our network business
as a result of the COVID-19 outbreak.
As of June 30, 2022, accounts receivable were
RMB89.3 million (US$13.3 million), representing a 30.2% decrease from accounts receivable of RMB127.9 million as of December 31, 2021.
The average period of sales outstanding for accounts receivable (also known as days sales outstanding) was 286 days in the first half
Bank Loans and Other Borrowings
2022, the Company had bank loans and other borrowings totaling RMB2.9 billion (US$426.0 million).
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 expenses, such as non-GAAP net loss and non-GAAP basic and diluted loss
per share for Class A and Class B ordinary shares. The Company believes excluding share-based compensation expenses 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 expenses are important in helping