Full Press Release Details
Concord Medical Reports Fourth Quarter and
Full Year 2015 Financial Results
BEIJING, March 28, 2015 /PRNewswire/
- Concord Medical Services Holdings Limited ("Concord Medical" or the "Company") (NYSE: CCM),
a leading specialty hospital management solution provider and operator of the largest network of radiotherapy and diagnostic imaging
centers in China, today announced its unaudited consolidated financial results for the fourth quarter and full year ended December
Fourth Quarter 2015 Highlights
Full Year 2015 Highlights
Dr. Jianyu Yang, Chairman and Chief
Executive Officer of Concord Medical, commented, "The year of 2015 was crucial for the Company's strategic transformation.
During the last year, we had laid a solid foundation for continuous sustainable and stable development by acquiring Concord Cancer
Hospital in Singapore, optimizing its operative segments and medical processes through working closely with our strategic partner,
MD Anderson Cancer Center ("MDACC"). In 2016, well prepared to receive a large number of high-end patients from mainland
China, Concord Cancer Hospital will provide world-class integrated cancer treatment, including the utilization of the advanced
immunotherapy and targeted drugs, to our high-end patients. The comprehensive cooperation between Concord Cancer Hospital and MDACC
will satisfy the needs of Chinese patients for the highest level of medical expertise.
Since 2012, Chinese government has published
a series of policies to facilitate medical reform by encouraging social capital to invest in the medical industry and form a diversified
industrial landscape. Accordingly, we have been undertaking our strategic transformation since 2013 by transforming the cooperative
centers with public hospitals into self-owned centers, taking advantage of our talent pool and years of experience to build our
own brand, Meizhong Jiahe Cancer Center. We plan to build the Meizhong Jiahe brand into the largest radiotherapy chain throughout
the country, providing high quality medical services featuring imaging diagnosis and radiotherapy. Meanwhile, we will establish
a sophisticated quality control system to improve the cure rate of radiotherapy and the life quality of patients. Datong Meizhong
Jiahe Cancer Center will launch its grand opening and start to treat patients at the end of April 2016. It will become our first
free-standing center in the Concord Medical network and set a milestone for the Company's strategic transformation.
In order to fully reflect our asset value,
we announced the listing of our subsidiary, Meizhong Jiahe Hospital Management Corp. Ltd. ("Meizhong Jiahe" or "MHM")
on the New Third Board in China in the second half of last year, and officially received approval to become a listed company on
the New Third Board the over-the-counter (OTC) stock exchange in China, in January 2016. In the first quarter of 2016, Meizhong
Jiahe announced to undertake asset restructuring and to launch a private placement. The funds raised in such private placement
will be used for its acquisition and construction of cancer centers.
Cancer is now a major challenge to the
health of the Chinese people. According to the report released by the National Cancer Center, new cancer patients in China reached
4.29 million in 2015 with 2.8 million deaths from cancer. As a member of the healthcare and medical industry, we have felt the
responsibility to make a contribution to the fight against cancer in China.
Healthcare and medical industry will become
a real "sunrise industry" in China. We intend to capitalize on this growing opportunity and take full advantage of favorable
government policies. Providing the advanced treatment technology and medical process, as well as the humanistic care, we will contribute
to the improvement of overall cancer treatment and diagnosis in China, while also generating long term, stable returns for our
shareholders at the same time."
Fourth Quarter 2015 Financial Results
Total net revenues were RMB135.1
million ($20.9 million) for the fourth quarter of 2015, a 15.7% decrease from the fourth quarter of 2014. Total net revenues were
Cost of revenue was RMB87.5 million
($13.5 million) for the fourth quarter of 2015, as compared to RMB73.3 million for the fourth quarter of 2014. Total cost of revenue
Gross profit was RMB47.6 million
($7.4 million) for the fourth quarter of 2015, representing a 45.2% decrease from the fourth quarter of 2014. The gross profit
margin for the fourth quarter of 2015 was 35.3%, as compared to 54.3% for the fourth quarter of 2014.
Selling expenses in the fourth
quarter of 2015 were RMB29.2 million ($4.5 million), representing a 15.9% increase from RMB25.2 million in
the fourth quarter of 2014. Selling expenses as a percentage of total net revenues increased to 21.6% for the fourth quarter of
2015 from 15.7% for the fourth quarter of 2014.
General and administrative expenses in
the fourth quarter of 2015 were RMB47.3 million ($7.3 million), representing a 266.7% increase from RMB12.9 million for
the fourth quarter of 2014. General and administrative expenses as a percentage of total net revenues was 35.0% for the fourth
quarter of 2015, compared to 8.0% for the fourth quarter of 2014.
The Company incurred asset impairment
of RMB 23.1million ($3.6 million), which mainly include the asset impairment for our network centers.
Operating loss was RMB52.0 million
($8.0 million) for the fourth quarter of 2015, compared to operating income of RMB48.8 million for the fourth quarter of 2014.
Income tax expense was RMB82.0 million
($12.7 million) for the fourth quarter of 2015, as compared to RMB40.8 million for the fourth quarter of 2014. The effective tax
rate for the fourth quarter of 2015 was 85.9%, mainly due to RMB35.8 million in withholding income tax expenses related to special
dividend declared on December 11, 2015.
Net loss attributable to ordinary shareholders
was RMB166.8 million ($25.7 million) for the fourth quarter of 2015, compared to net income attributable to ordinary shareholders
of RMB28.1 million in the fourth quarter of 2014. The net loss included net loss from network business of RMB38.5 million, net
loss from hospital business of RMB18.2 million, and loss resulted from bad debt of RMB9.3 million, asset impairment of RMB23.1
million, as well as withholding tax of RMB77.7 million, compared to net income attributable to ordinary shareholders of RMB28.1
million in the fourth quarter of 2014.
Basic and diluted loss per ADS for
the fourth quarter of 2015 was RMB3.74 ($0.58) and RMB3.74 ($0.58).
Non-GAAP net loss for the fourth
quarter of 2015 was RMB133.5 million ($20.6 million), compared to non-GAAP net income of RMB21.6 million for
the fourth quarter of 2014. Non-GAAP basic and diluted loss per ADS in the fourth quarter of 2015 was RMB2.99 ($0.46) and RMB2.99 ($0.46),
Adjusted EBITDA (non-GAAP) was RMB2.3
million ($0.4 million) for the fourth quarter of 2015, compared to RMB101.7 million for the fourth quarter of 2014.
2015 Fourth Quarter Financial Results
Net revenues from network business decreased
by 18.6% to RMB130.4 million ($20.1 million) in the fourth quarter of 2015 from RMB160.3 million in the fourth quarter
of 2014. The decrease was primarily attributable to network centers closed in the year 2015 and revenue-sharing split change according
to the contracts signed between the Company and our public hospital partners.
As of December 31, 2015, the Company
operated a network of 127 centers in 53 cities in China and had entered into agreements to establish one additional center.
The Company had no center newly opened or closed in the fourth quarter of 2015.
Cost of revenue of the network
business was RMB78.2 million ($12.1 million) in the fourth quarter of 2015, compared to RMB73.3 million in
the fourth quarter of 2014. The increase was mainly due to cost increase resulting from cost-sharing split change according to
the contracts signed between the Company and our public hospital partners and increased medical consumable expenses and maintenance
expenses for the network.
Gross profit from the network
business was RMB52.2 million ($8.1 million) in the fourth quarter of 2015, compared to RMB86.9 million in
the fourth quarter of 2014. The gross profit margin of the network business for the fourth quarter of 2015 was 40.1%, compared
to 54.3% for the fourth quarter of 2014. The decrease in gross profit was mainly due to the revenue-sharing and cost-sharing split
change according to the contracts signed between our Company and public hospital partners, as well as higher cost of revenue attributable
to the increased high-value medical consumable expenses and maintenance expenses for the network.
Selling expenses of the network business were RMB29.0
million ($4.5 million) in the fourth quarter of 2015, compared to RMB25.2 million in the fourth quarter of 2014.
Selling expenses as a percentage of net revenue from network business was 22.2% in the fourth quarter of 2015, compared to 15.7%
in the fourth quarter of 2014. The increase in selling expenses was mainly due to increased conference, office and travel expenses.